> For the complete documentation index, see [llms.txt](https://yieldzard.gitbook.io/yieldzard/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://yieldzard.gitbook.io/yieldzard/what-is-apy.md).

# What is APY?

APY description.

**APY** stands for Annual Percentage Yield. This measures the real rate of return on the amount of your principal tokens amount by taking into account the effect of compounding interest. In the case of Yieldzard DeFi, your $YLZ tokens represent your principal, and the compound interest is added periodically on every Rebase event (<mark style="color:purple;">**every 5 minutes**</mark>). &#x20;

Your new principal amount is your then-current Yieldzard token amount, plus your new rebase token amount. This total amount is what gets calculated for your next rebase rewards.&#x20;

One interesting fact about APY is that your balance will grow not linearly but exponentially over time! Assuming a daily compound interest of <mark style="color:purple;">**2.53165%**</mark>, if you start with a balance of 1 $YLZ on day 1, after a year, your balance will grow to about <mark style="color:purple;">**9,186.57 $YLZ**</mark>. That is the power of compound interest!