What is APY in cryptocurrencies? My experience between promises and reality

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*For a veteran crypto enthusiast*What a brilliant trap the APY is in the crypto world! As an investor who has seen too many empty promises, I must confess that this indicator has seduced and betrayed me more times than I can count.The annual percentage yield (APY) supposedly measures how much you will earn in a year considering compound interest. Sounds wonderful, doesn&#39;t it? But behind those attractive percentages lies a much more complicated reality, especially on digital platforms.## APY vs APR: the battle of misleading numbersWhen I compare APY with APR, I clearly see the psychological trick. APR does not include compounding, while APY does. The result? APY always seems more attractive.A real example: I was offered a 2% APR on a platform, but they boasted a 3% APY. That additional 1% made me bite the hook. Do you know what happened? The market volatility ate up my gains in two days. That "interest on interest" turned out to be a mirage.## The deceptively simple formulaMathematicians summarize it this way:> APY = (1 + r/n)^(nt) - 1Simple? Not at all. This formula completely ignores the wild volatility of the crypto market. A few months ago, I deposited funds on a platform that promised a 15% APY. Two weeks later, the coin had devalued by 30%. My magnificent APY turned into a net loss.## My experience with "APY investments"### Cryptocurrency LoansI lent my Bitcoin to a platform that promised a juicy APY. They never mentioned the counterparty risks. When the platform had liquidity issues, my earnings were frozen for months.### Yield farming (What a nightmare! I moved my assets between different pools looking for the highest possible yield. It was like playing poker with my eyes blindfolded. The impermanent losses and the risk of rug pulls cost me more than I earned.) StakingI locked my coins for a whole year. The promise: a 25% APY. The reality: when the locking period ended, the value of the coin had dropped so much that my "gains" were a cruel joke.## The uncomfortable truth about crypto APYThe APY in cryptocurrencies is like a mirage in the desert - precious from a distance, but it disappears when you get closer. Platforms use it as bait, showcasing optimistic scenarios that rarely materialize.It especially irritates me to see how some platforms advertise astronomical APYs without mentioning the associated risks. 500% APY? Yeah, right... until you lose all your capital.The next time you see an APY that looks too good to be true, remember my words: it probably is. Greed is fraud&#39;s best friend in this market, and pretty numbers are its favorite weapon.The APY can work for you, but it can also be your ruin. In my portfolio, the safest investments have yielded better results than chasing those outrageous APYs that dazzled me at first.My advice? Be wary of big numbers. The crypto market doesn’t give away money, no matter how much they promise you with fancy formulas.