Bybit Cloud Wallet offers a seamless way to manage cryptocurrencies without having to handle private keys. Learn more about how it works in this article.

Bybit Cloud Wallet makes crypto management seamless for everyone by offering a user-friendly platform for storing and managing cryptocurrencies without the hassle of handling 

 not only enhances security but also simplifies interactions with Bybit Web3 services. In this article, we'll explore how Bybit Cloud Wallet works and its benefits and risks, and provide a step-by-step guide to using the wallet. 

Bybit Cloud Wallet is a custodial digital wallet integrated with the Bybit platform, allowing users to store and manage cryptocurrencies without handling private keys directly. It offers enhanced security and accessibility for web3 interactions.

Bybit Cloud Wallet is a custodial wallet, meaning that Bybit manages the private keys on behalf of its users. This design simplifies the experience by removing the burden of securely storing seed phrases or private keys. It integrates with Bybit accounts to streamline cryptocurrency management and provide secure handling for private keys.

Users can access their wallet by logging into their account and completing the Cloud Wallet setup. A unique wallet address is generated, and the associated private keys are securely stored on Bybit's cloud servers. Once the wallet is configured, users can safely store, manage and transact a variety of digital assets. 

When initiating transactions — such as sending or receiving cryptocurrency — a request is created and securely transmitted to Bybit’s servers. The provider verifies the request using the stored private keys, ensuring it’s been authorized by the rightful owner.

Depositing funds into the Bybit Cloud Wallet is straightforward, and users can transfer cryptocurrencies from other wallets within the Bybit Web3 platform with ease. Withdrawals follow a similarly simple process, whereby users specify the amount and destination address while selecting their preferred gas fees.

The wallet uses standard security protocols to protect user accounts and funds from unauthorized access. While the custodial nature of the wallet makes it user-friendly, it also necessitates trust in Bybit's security practices.

Bybit Cloud Wallet integrates with various Bybit Web3 services, enabling users to trade, 

 (DApps) directly through the wallet’s interface.

Bybit Cloud Wallet offers a range of benefits for users seeking an efficient and secure way to manage their cryptocurrency assets.

While Bybit Cloud Wallet offers numerous advantages, users should also be aware of several inherent risks associated with its use.

: Navigate to the Bybit homepage and log in to your Bybit account. Then, click on the 

tab on the top left corner of the page. 

. This will generate a unique wallet address associated with your account.

Now that you’ve created your Bybit Cloud Wallet, here’s how you can deposit tokens and start interacting with DApps. There are two ways in which you can deposit tokens into your Bybit Cloud Wallet — by transferring from your Bybit Funding Account, and by transferring from your external wallet.

: Please ensure that you already have funds in your Bybit Funding Account before you proceed with the steps below. 

: Hover your cursor over your profile icon in the upper right corner of the Bybit homepage, and click on 

 (Web3) and your Bybit Wallet (Web3) address will automatically be filled. Select your preferred 

and enter the amount you wish to withdraw to your Bybit Wallet (Web3).

: After you’ve checked and verified all details, click on 

Congratulations! You’ve successfully transferred assets from your Bybit account to your Bybit Cloud Wallet!

Let’s use MetaMask and the BNB chain as an example. 

: Navigate to your MetaMask wallet. Then, click on the 

. Click on the copy icon to copy your Bybit Wallet address.

and paste your Bybit Cloud Wallet address into the input box. 

: Please make sure you choose BSC. Otherwise, your USDT and BNB may not be transferred successfully.

Congratulations! You’ve successfully transferred assets from your external wallet to your Bybit Cloud Wallet.

 next to the token you would like to withdraw, and transfer your funds to your Bybit Funding Account.

, enter the amount you would like to withdraw, choose your gas fees and click on 

: Confirm the details, request the verification code and submit your withdrawal request.

 next to the token you would like to withdraw, and transfer your funds to your external wallet.

: Enter the receiving wallet address and the amount, and choose your gas fees. Click on 

: Review the details, submit the verification code and confirm your withdrawal.

: To view your transfer history, hover your cursor over the 

tab in the top-right corner of the Bybit Web3 page, and click on 

: You can check your deposit and withdrawal history under either the 

Who Is Best Suited to Use the Bybit Cloud Wallet?

Bybit Cloud Wallet combines ease of use with robust security measures, making it a suitable option for users who prefer not to manage their own private keys, while still being able to conduct cryptocurrency transactions.

Individuals who are new to cryptocurrencies will find Bybit Cloud Wallet appealing due to its user-friendly interface and custodial nature, which eliminates the need for managing private keys. This accessibility allows users to engage with digital assets without needing extensive technical knowledge.

 services will also appreciate the wallet's integration with various DApps and platforms, allowing for easy interaction within the blockchain ecosystem.

Deciding whether to use the Bybit Cloud Wallet depends upon your specific needs and preferences. If you value security, convenience and the ability to manage multiple cryptocurrencies within a single platform, Bybit Cloud Wallet is a strong choice. However, if you prefer having full control over your private keys and assets, a 

 might be a better option. Consider your priorities and the level of control you desire over your digital assets when making your decision.

Bybit Cloud Wallet offers a secure and convenient way to manage cryptocurrency assets without the complexity of handling private keys. Its seamless integration with Bybit Web3 services makes it ideal for beginners and experienced users alike, enabling easy interactions with DApps and DeFi platforms. While Bybit Cloud Wallet offers strong security and user-friendliness, the risks of using a custodial wallet remain a consideration for those seeking full control over their assets.

Beginner

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Bybit Cloud Wallet: Seamless Crypto Management for Everyone

USUAL introduces USD0, a stablecoin backed by U.S. Treasury Bills, offering transparency, security, and revenue sharing through its governance token, USUAL.

More than a decade ago, in mid-2014, the first 

 arrived on the stage of the crypto market. These cryptocurrencies were designed to provide stability in the typically volatile world of crypto, and to serve as a bridge between the traditional finance (TradFi) and 

 (DeFi) ecosystems. At the core of their functionality is a mechanism that maintains a close peg to some traditionally valued asset, be it the U.S. dollar, euro or 

Stablecoins have proved to be tremendously popular, with the leading asset in this niche, 

 (USDT), routinely attracting higher trading volumes than any other cryptocurrency — including the mighty Bitcoin. The second most popular stablecoin in the market, 

 (USDC), also enjoys multibillion-dollar daily trading volumes, and ranks among the top 10 cryptocurrencies by market cap.

Despite their popularity, many leading stablecoins — including the dominant USDT and USDC pair — have opaque collateral management mechanisms, are lacking in transparency, don't distribute revenues to the wider user community and are highly centralized in terms of control.

Usual (USUAL) is a DeFi solution launched on the 

 (ETH) blockchain that aims to tackle these deficiencies of traditional stablecoins by offering a 

 (RWA)–backed stablecoin and redistributing protocol revenues among its users. The platform's primary stablecoin — USD0 — is backed by collateral invested mainly in short-term U.S. Treasury Bills; maintains a tight peg to the greenback via these secure investments; has a fully transparent reserve verification system; and opens up additional yield opportunities across a variety of external DeFi protocols via a 

 (USUAL) is an Ethereum-based DeFi platform that offers an RWA-backed, USD-pegged transparent stablecoin, USD0, and distributes protocol revenues among its user community. 

USD0 is backed by collateral invested in RWAs, primarily in short-term U.S. Treasury Bills. The short-term, highly liquid and secure nature of these government-issued assets ensures that USD0's peg to the U.S. dollar isn't likely to be compromised.

Usual has partnered with Hashnote, a Florida-based regulated provider of digital and tokenized fund products, to facilitate secure investment in U.S. Treasury Bills and associated products.

Usual's USD0 is a unique stablecoin product, distinct from the dominant assets in this niche, 

 and USDC. While these cryptocurrencies also maintain fiat reserves to back their value, they’re controlled by centralized corporate entities, and their USD reserves are exposed to the traditional banking system, with poorly known levels of risk associated with them.

, whose values aren’t backed by fiat assets, and which are highly dependent upon underlying protocols’ activity to maintain their pegs. In many cases, these algorithmic coins lose their pegs and stability when the underlying lending or borrowing activities on their protocols are manipulated by 

 or become subject to panic-driven runs. The most notorious example was the 2022 

Usual’s platform also offers a liquid staking version of USD0, USD0++, which can be used throughout the DeFi ecosystem for additional yields. It has partnered with several Ethereum DeFi protocols to expand the universe of platforms where USD0++ can be utilized, including 

Usual also has another distinct feature: the protocol aims to distribute future revenue among its users, specifically among holders of its upcoming USUAL 

The platform was developed by the France-based Usual Labs, a blockchain development outfit co-founded by Adli Takkal Bataille, Hugo Sallé de Chou and former French parliament member Pierre Person. Usual launched the USD0 stablecoin in mid-2024. In late November 2024, the platform introduced the USUAL governance token, set to be launched sometime in mid-December 2024.

The introduction of the USD0 stablecoin is a potentially paradigm-changing event for the crypto market. This innovative asset adopts many of the advantages of fiat-backed stablecoins, but also resolves many associated issues. Usual Labs has targeted several goals with the advent of USD0 and its unique working mechanism.

One key aim is to change the way that profits from decentralized stablecoin operations are shared. Usual's revenue is to be shared with the user community — namely, the holders of the USUAL token. All the revenue generated from the platform's operations flows to its treasury. USUAL holders are in charge of this revenue, making them eligible to decide on the actual distribution. In essence, owning USUAL entitles you to a share of potentially 100% of revenue generated by the platform.

This starkly contrasts with the way that other fiat-backed stablecoins, notably USDT and USDC, operate. All the revenues generated from these stablecoins are appropriated by their respective founding companies — Tether Limited for USDT, and Circle Internet Financial Limited for USDC. While the risks from the operations of these assets are externalized and shared with holders of the stablecoins, the revenues are internalized and scooped up by Tether and Circle.

Another aim of the Usual project is to bring transparency to the management of collateral that backs the USD0 stablecoin. As a decentralized protocol, Usual provides the transparency of collateral funds' allocation. Again, this contrasts with the opaque nature of the way that USD collateral for some stablecoins is managed. Tether's USDT has particularly 

 in the crypto investor community, as the company has never conducted a full-scale audit for its vast claimed dollar reserves.

Another aim of Usual is to provide a stablecoin that’s completely secure from exposure to the traditional, fractional reserve-based banking system. Some crypto investors have derided the fractional reserve system, whereby only a small proportion of client liabilities are actually held at any given time by banks. Projects like USDT and USDC rely heavily on the traditional banking system, which backs their U.S. dollar reserves. These banks naturally rely on fractional reserves that, at least in the opinion of the most risk-averse investors, exposes them to 

In contrast, USD0 is backed by short-term U.S. Treasury Bills, an asset class that’s fully backed by the U.S. government's pledge. These are considered among the safest assets in the world of finance, as the U.S. government has never yet defaulted on its payment obligations. Unlike USD deposits in banks, USD0's Treasury Bill–based collateral isn't exposed to the risks of the fractional reserve system. As such, the coin's collateral is based on a government-backed asset, providing a level of security that most fiat-based stablecoins in the market are unlikely to match.

Usual uses a three-token model to power its operations and services. There's the fiat-backed USD0 stablecoin, which is protected by Treasury Bill collateral. The second asset is the USD0++ LST, a derivative of USD0 issued upon staking the latter. And there’s the USUAL governance token that grants holders the right to participate in decision-making on the protocol's rules and future direction.

The Usual protocol provides two ways to mint the USD0 stablecoin:

:This is normally done by investing in the USYC fund and using it as collateral, then depositing it into the mint engine to mint USD0. USYC is an on-chain representation of the Short Duration Yield Fund (SDYF) provided by Hashnote, a regulated provider of tokenized fund products. USYC/SDYF is based mainly on U.S. Treasury Bills with short-term maturity.

:You can also mint USD0 indirectly on a 1:1 basis by supplying the USDC stablecoin as collateral.

Redeeming the stablecoin is also possible in two ways — directly through the protocol, or via the secondary market. When using direct redeeming, you simply withdraw your RWA collateral using the protocol's interface. Alternatively, you can sell USD0 for USDC or USDT via a secondary market platform, such as 

 (CRV), a popular DeFi protocol that specializes in stablecoin assets.

USD0++ is an LST representation of USD0. When you stake USD0 on the platform, you’re issued USD0++, which is fully composable and can be used on various Ethereum-linked protocols to earn additional yield. You can lock USD0 to get issued USD0++ for four years. However, you’re also free to unstake at any time.

Staking rewards from locking USD0 to get USD0++ are paid in USUAL tokens. Usual's model rewards long-term staking commitments, as users are encouraged to stake for at least six months — this is the minimum period of staking required to qualify for what the protocol calls the 

 (BIG). BIG essentially refers to a guaranteed yield from native staking of the underlying RWAs on the Usual protocol. When the period concludes, the staker can choose to collect the yield in either USUAL or USD0.

Yields start accumulating from day one of staking. Although users are free to unstake at any time, those who do so before the six-month minimum period will forfeit accumulated rewards.

USUAL is the Usual protocol's governance crypto token. It was unveiled on Nov 19, 2024, and is currently in pre-market mode only. It's expected that USUAL's public launch will occur in the near future. As USUAL is a community-first token, 90% of the tokens are distributed to the community with only 10% allocated to insiders (team and investors).

Usual feeds its revenues into its protocol's treasury, which is controlled by the USUAL holder community. As such, USUAL holders own 100% of the platform, a significant departure from the system used by many other stablecoin issuers, whereby a corporate entity earns all or the majority of the profits. 

Additionally, Usual is designed such that its protocol will incentivize early adopters and long-term holders. As the TVL of USD0 increases, Usual will generate more revenue. The emission rate of USUAL is also disinflationary, gradually reducing as the TVL of USD0 rises and enhancing the scarcity of the token, which will subsequently lead to a boost in its value.

At the initial stages of the platform's market presence, Usual Labs is largely responsible for governance decision-making. However, this function will be taken over by USUAL holders, likely in the form of a 

Although called a governance token, USUAL has additional functionalities beyond supporting the protocol's governance processes. It’s also used to distribute yields from staking ( as discussed in the section above on USD0++). Rewards from the protocol's loyalty point campaigns are also airdropped in USUAL. 

In addition, USUAL can be staked for additional governance rights and rewards. USUAL stakers will receive 

, from which they can earn a portion of USUAL emissions and 50% of the fees generated from people unstaking their Usual assets (USUAL or USD0++).

USUAL's maximum and total token supply are specified at 4 billion. The initial circulating supply during the early days of the token's pre-market trading is close to 500 million as of Dec 2, 2024.

The Usual protocol ran a points-based reward program from July through the last week of November 2024. Called the 

, it let early users accumulate points by acting as liquidity providers before the protocol's full public launch phase. The accumulated Pills points will determine users' eligibility for a USUAL airdrop, slated for mid-December.

The airdrop will allocate 8.5% of the token's supply to eligible users — the more Pills points you've earned, the more USUAL tokens you’ll receive.

During the token's pre-market trading stage, Bybit is one of the rare platforms that’s allowing you to access it. As of Dec 2, 2024, 

 on Bybit's Pre-Market Perpetuals Trading platform as a 

 lets you invest in a variety of upcoming cryptocurrencies via USDT-based perpetual futures contracts before these assets are listed on the main spot or derivatives markets. Using this platform, you can access a range of promising new crypto assets before they become publicly available. There are two main limits enforced by Perpetual Pre-Market — the position size cannot exceed $250,000, and leverage is permitted up to 5x.

Stablecoins are one of the oldest asset types in the crypto industry, while RWAs are a much newer trend that’s growing increasingly popular among investors. The Usual project has decided to marry these two areas, providing an RWA-backed, USD-pegged stablecoin — USD0. The concept of using an RWA for stablecoin collateral may not be totally unique. However, using a highly secure asset such as U.S. Treasury Bills with short-term maturity is something that truly distinguishes the Usual protocol.

Distributing revenue among the governance token holder community is also a refreshing innovation in a niche dominated by providers who largely internalize protocol incomes. Currently, the stablecoin market is heavily dominated by USDT and USDC, with 

 (FDUSD) also recently posting impressive, multibillion-dollar daily trading volumes. All three of these stablecoin issuers lack a mechanism to share revenue with their users. A major stablecoin provider that utilizes a democratized way of sharing protocol revenues with the user community is a deserted area, one that the Usual platform is keen to claim.

With all these merits of the Usual protocol, the upcoming USUAL token is a promising and potentially rewarding asset. Investors interested in stablecoins grounded in highly secure TradFi collateral might want to take a closer look at these new arrivals on the block — the USD0 stablecoin and the USUAL governance token.

Intermediate

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Usual (USUAL): A New Model of Collateralized Stablecoin Ownership

AI agents in crypto are autonomous entities designed to operate within blockchain ecosystems. A popular AI agent is AIXBT, which specializes in providing crypto market intelligence.

The cryptocurrency ecosystem runs on narratives, and the current cycle is being driven by two major ones: meme coins and artificial intelligence (AI). 

The recent AI agent craze has captured both of these narratives to a large extent. November 2024 saw several AI agents gain significant traction, boasting tokens with market caps in hundreds of millions of dollars. 

As of now, most of these agents are used as key opinion leader (KOL) influencers to post on X (formerly Twitter), interact with X users and promote their particular tokens. However, they have the potential to evolve to handle complex tasks and reshape how users interact with 

AI agents are autonomous entities designed to operate within 

 ecosystems. They can utilize machine learning algorithms and data analytics to perform a variety of tasks, such as trading, posting tweets, building a community and even creating art or music. 

At first glance, an AI agent might just look like a fancy rebranding of traditional bots that have existed in the ecosystem for a long time. But unlike traditional bots that follow rigid rules, AI agents can analyze data in real time and adapt their strategies accordingly. This flexibility and learning capability make them significantly more sophisticated than conventional bots. 

AI agents have a variety of applications within the cryptocurrency space:

, an AI agent deployment platform that operates on the 

 blockchain. It enables any user to create and launch an AI-powered agent that can perform a variety of tasks and accrue value for its token holders. 

The recent popularity in the AI narrative has driven the price of Virtuals Protocol’s token, VIRTUAL, from $0.05 to $1.89 in just a few months. 

Virtuals Protocol operates similarly to the popular Solana-based meme coin launchpad 

. By purchasing VIRTUAL tokens, any user can build an AI agent to seamlessly interact with different networks. Each agent requires 10 VIRTUAL tokens for deployment. Once deployed, the agent token enters a bonding curve, whereby users can buy or sell it depending upon their interest.

If the bonding curve market cap reaches $420,000, the token’s liquidity pool is deployed on 

 and the agent is transferred to a new contract that handles the on-chain creation process. The agent also becomes visible on the platform, where users can trade it freely. 

There have been several notable launches from Virtuals Protocol, none more so than 

, which has reached a market cap of approximately $200 million in less than a month. AIXBT specializes in providing crypto market intelligence and automates the process of tracking market trends and interpreting data. It tracks over 400 KOLs to understand trending narratives in real time, and can perform technical analysis on the price movements of different cryptocurrencies. 

AIXBT has had a remarkable run-up in price during November 2024, as its market cap has increased from around $42 million to over $230 million. Its price has since retraced slightly, with its current market cap hovering around $174 million. The number of token holders has also seen a sharp increase over the past month. 

While AI agents present numerous advantages, they also bring some challenges. The biggest concern with any AI agent is 

, as their responses aren’t always accurate. Therefore, solely relying on them for research can be counter-productive. The second major concern is security: adding an AI agent to execute a transaction also adds an additional layer of security risk and vulnerability that could be exploited by malicious actors. 

Conclusion: The Future of AIXBT and AI Agents

Despite the risks outlined above, AI agents such as AIXBT have become the hottest sector of the current crypto cycle. The 2017 cycle was led by the advent of 

 platforms, and the 2021 cycle was largely driven by DeFi. Now, as we head into 2025, we could possibly see AI agents becoming the breakthrough technology that provides a new case for cryptocurrency.

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AIXBT by Virtuals: The AI Analyst Shaking up Crypto Twitter

Sonic Labs is set to publicly launch its new layer-1 blockchain, Sonic, after achieving its Genesis block.

Daily Top Performer — Hedera Hashgraph (HBAR)

The S&P 500 rose 0.24% to a record high, led by tech stocks, as investors eye labor data and Fed speeches. Coindesk Indices, an index measuring broader cryptocurrency market performance was down by 0.78%, with Bitcoin and Ether dropping by 1.51% and 2.48%, respectively in the past 24 hours.

Today's top performer is HBAR, which surged 59.0% following the announcement of Hedera and SEALSQ's collaboration to revolutionize decentralized physical infrastructure.

Hedera Hashgraph (HBAR), launched on September 2019, is a cryptocurrency network that supports fast transactions and application deployment, overseen by a select group of business-approved nodes. This design ensures quick finality and reliability, attracting major corporations like LG, IBM, and Boeing as participants. SEALSQ and the Hedera Hashgraph Association are collaborating to develop 

 using Hedera's DLT. The partnership integrates SEALSQ's platform to securely manage trillions of object transactions, aiming to revolutionize physical infrastructure with scalable, decentralized solutions.

Check Out the Latest Prices, Charts, and Data of 

, Sonic, after achieving its Genesis block. Positioned as a faster, EVM-compatible successor to the Fantom Opera network, Sonic aims to reduce latency and transaction fees while incentivizing developers with 90% of generated fees. Supported by the Fantom Foundation, Sonic allows users to swap FTM tokens for S tokens at a 1:1 ratio, with 200 million S tokens being airdropped. Sonic achieved 720-millisecond transaction finality during testing, positioning it as a competitor to fast EVM chains like Solana.

Yesterday, the BTC Spot ETF data shows a total flow of $15.3 million, with $28.1 million flowing out of GBTC and $43.4 million in non-GBTC products.

, offering free points (shards) to participants. To earn 3000 shards, users need to sign up, verify their email, and connect their X and Discord accounts. Additional points can be earned by creating content about Talus on X. Talus is a high-throughput layer 1 blockchain designed for decentralized AI agents, and its token is confirmed.

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Sonic Labs Prepares for Launch as the Fastest Fantom Successor Blockchain

Bybit Learn

Investing

DeFi

web3

APR and APY are two different ways of calculating interest rates. Read on to find out their difference and how it affects your crypto investments.

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APR (annual percentage rate) and APY (annual percentage yield) are key concepts used in the calculation of interest from a variety of investments or loans. These investments may include the provision of funds to liquidity pools on exchanges, 

Some of these investments may pay you interest based on the APR rate, while others use the APY method of calculating the payout. For any investor, it’s imperative to know the difference between APR and APY in order to allocate your funds to the most profitable income sources.

Compounding is the only difference when you calculate the return of APR and APY. With all other things being equal (the initial investment, the quoted interest rate and the period of investment), APY will always result in a higher final amount due to the compounding effect.

In practical terms, if you borrow money it’s better to do so using APR interest rates as a base. However, if you invest in funds, APY interest rates will yield higher total returns.

Many people are familiar with the interest rate paid on a savings account or charged for loans by traditional financial institutions. When you’re quoted a 5% annual interest rate for your investment of $100, it will yield $5 in profit in exactly one year from the time you invested. Alternatively, if you borrow $100 at the same interest rate, you’ll have to pay back your borrowed amount plus $5 in interest a year later.

This simple interest rate calculation is based on the APR interest rate. 

Whether in traditional banking or the crypto world, APR refers to the ordinary (simple) interest applied to the principal amount of an investment

deposit account or loan. It doesn’t take into account the concept of compounding interest.

APR is an annualized figure. If the principal balance on an investment, loan or credit card interest is held for less than a year, the interest applies on a 

 basis. For example, a half-year investment with an APR of 5% will earn you exactly half the interest, 2.5%, on your principal amount.

Let’s say you invest 1ETH in a lending pool on a decentralized finance (

) platform to earn interest, and the interest rate in APR is 24%. If you lock your funds in the pool for exactly 365 days, your total investment will grow to 1.24 ETH. This includes your principal of 1 ETH and the 0.24 ETH (based on the 24% APR) that accrued as interest.

Below is the basic formula for calculating a total final amount based on the annual percentage rate:

 ﹦ principal, i.e., the initial investment or loan amount

Using our 1 ETH as the principal for the investment, the figures in the formula are:

This assumes an investment period of exactly one year. If you hold the investment for a three-month period, i.e., one quarter (0.25) of a year, then the formula yields:

APY measures the interest rate applicable to an investment or loan that takes into account 

 The interest can be compounded over any set period — continuously, daily, weekly, monthly or annually. The inclusion of compounding interest makes calculating APY slightly more complex, as it includes the number of periods at which the amount is adjusted (based on the adjusted interest rate).

The formula for the final amount based on the annual percentage yield is as follows:

The important part of the formula is the N value — the number of compounding periods. It’s what makes APY and APR different. The number of compounding periods is the number of times the investment amount is recalculated, based on the quoted nominal interest rate.

During each recalculation, the interest is added to an amount that includes the initial investment plus all the previously accrued interest earnings. 

Let’s imagine you invest 1 ETH for a year at the APY rate of 24%, and your investment has two recalculation periods, at 6 months and 12 months, respectively. In this scenario, how much interest in APY you'll get is calculated according to the formula as follows:

APY vs. APR: The Differences in Compound Interest

APY yields a higher payout due to compounding. Compound interest in periodic recalculations can significantly increase the total final amount, as compared to APR-based interest. 

Hence, the same initial investment (1 ETH) over the same period (1 year) with the same quoted interest rate (24%) produces the final payouts of 1.24 ETH using the APR interest rate and 1.2544 ETH using APY's rate. As you can see, with compounding interest, your APY interest is magnified over time.

The more compounding periods used during the investment period, the higher your final amount. For instance, if your 1 ETH yearly investment at a fixed APY of 24% is compounded on a monthly basis, i.e., 12 times during the period of investment, then the final payout will be as follows:

APR and APY rates fluctuate depending on the terms and conditions of the lender and the different types of loans you sign. 

A fixed rate refers to a promised APR or APY throughout the term, disregarding market fluctuations or product performance. But if the rate is variable, the APY for your deposit accounts may be subject to different APY yields, depending on the market's demands.

In traditional finance, APR rates are widely advertised, particularly for loan products, while APY rates are more often used to market investment products. In the world of crypto, both APR and APY are used extensively on DeFi protocols, centralized exchanges (

) and other finance-related crypto platforms for a variety of lending and borrowing opportunities, liquidity pools, staking services, yield farms and more. Most large DeFi and centralized crypto finance providers have products with both APR and APY rates.

Staking Pools With Investment Opportunities in APY and APR, as Advertised on the World’s Most Popular DeFi Platform ― 

When borrowing funds or investing on platforms using APY rates, pay close attention to the mechanism of compounding, i.e., how many times and at what intervals your investment or loan will be compounded.

Naturally, APR rates are better for borrowing money, while APY is more beneficial for investing. The effect of compounding can work wonders for you when investing crypto for yield.

“My wealth has come from a combination of living in America, some lucky genes, and compound interest.”

 product suite allows you to stake a variety of popular coins with interest paid in APY in a low-risk, guaranteed-withdrawal environment. You can choose between flexible and fixed-term investment periods. The platform currently offers an APY rate of ≥ 5% for some 

, one of the highest APY rates in the industry for stablecoin investments.

Some of the Current Offers on Bybit Savings

Other Investment Factors Besides APY and APR

When researching crypto investment opportunities on DeFi and centralized platforms, comparing APR and APY (and looking at the advertised interest rates) is only one factor in making a decision. Additional factors to take into account include the following.

Various fees usually accompany crypto investment opportunities, including those for transactions, withdrawals, closing costs and gas, which are charged by the underlying

 on decentralized platforms. Always take these additional fees into account when calculating your overall final returns. An opportunity with a high APY or APR but an unfavorable fee structure may work out worse than you initially expected.

Make sure you understand whether the advertised APR or APY rates are variable or fixed. Fixed rate opportunities apply the advertised interest rate for the duration of the investment, while variable rates are subject to fluctuations depending upon market conditions.

Additional Benefits and Rewards From the Investment

In some cases, in addition to earning interest on your investment you may get side benefits, such as liquidity provider (LP) tokens. These tokens may be reinvested on the same platform or other ones for further yields.

Invested Coin’s Current Performance and Future Outlook 

Some DeFi farms and pools advertise eye-popping APY and APR rates. However, these opportunities are often based on highly volatile coins with an unstable future outlook. These coins might also feature high inflation rates and/or volatility, which can lead to future depreciation in value. 

While your investment is earning a high return, based on attractive APY or APR rates, the coin you’ve chosen may be depreciating on a wider scale in the market. For instance, an APY or APR of 300% will be of little value if the cryptocurrency you’ve used drops in price by 400% during the year of your investment.

Larger and more established platforms, such as PancakeSwap and

, are time-tested and usually have ample liquidity. It’s best to stick with such providers, even if you’ve spotted those great APR and APY rates on a smaller platform. In an industry awash with scams, 

 and project failures, this point is of great importance to any crypto investor.

The crypto industry offers a vast array of investment and borrowing opportunities that are based on APY and APR rates. Due to the nature of the crypto market, APY and APR rates are often a few magnitudes higher than those you may encounter in the traditional finance industry. This opens up more lucrative return opportunities, but also carries more risks.

The Difference Between APY and APR in Crypto Explained

Grab Up to 5,000 USDT in Rewards

Grab Up to 5,000 USDT in Rewards