Annual Percentage Rate (APR)

What Is An Annual Percentage Rate (APR)?

The Annual Percentage Rate (APR) is the interest rate charged on a loan or credit card, expressed as a percentage of the amount borrowed or owed, including fees and charges.

In cryptocurrency, APR refers to the interest rate offered to investors who lend their crypto assets through a lending platform.

This rate takes into account the interest rate and fees charged to borrowers.

Cryptocurrency lending platforms offer different interest rates depending on the type of loan or currency being lent out.

Exchanges offer two main types of lending:

  1. Fixed lending: Fixed lending involves locking up the cryptocurrency for a specific period, usually seven to ninety days, at a fixed rate. This lending pays a higher interest rate but prevents investors from accessing their cryptocurrency during the lock-up period.
  2. Flexible lending: Flexible lending works like a savings account, allowing investors to withdraw their cryptocurrency anytime. However, the rates of return offered by flexible lending are lower than those offered by fixed lending.