Crypto Lending Interest Rate Comparison
Compare two “earn” products (lending, savings, or yield accounts) using consistent compounding math. This does not model default risk—use it to compare rate mechanics and fees.
Why Crypto “Earn” Rates Are Hard to Compare
Crypto lending and “earn” products advertise yields in different ways: some quote APR, others quote APY, some compound daily, others compound weekly, and some pay interest in a different token. Platforms may also take fees or spread, and some require lockups where funds cannot be withdrawn. Without a consistent model, it is easy to pick the wrong product because two headline yields are not directly comparable.
The best way to compare products is to convert everything into the same framework: “If I deposit P today and hold for t months, how much will I have after compounding and fees?” That is what this calculator does. It takes an APR or APY, applies compounding frequency, subtracts platform fees as a percent of interest earned, and projects ending balance and interest earned over your holding period.
This calculator does not attempt to model the biggest risk in crypto lending: counterparty and platform risk. Rates are meaningless if funds are frozen or lost. Use this tool for the math, and do separate due diligence on risk.
APR vs APY
APR (annual percentage rate) is a simple annual rate that does not include compounding. APY (annual percentage yield) includes compounding effects. If interest compounds more frequently, APY will be higher than APR for the same nominal rate.
If a platform quotes APR and compounds n times per year, the effective APY is:
If a platform quotes APY directly, you can treat it as already incorporating compounding and model growth over time using an effective periodic rate.
Compounding Over a Holding Period
Let P be principal, r be APR as a decimal, n be compounds per year, and t be holding period in years. If interest is reinvested, the ending balance is:
Platforms sometimes take fees from interest (for example, a 10% performance fee). If fee rate is f, the net interest earned is reduced by multiplying interest by (1−f).
Worked Example
You want to park 1.5 BTC for 9 months.
Product A offers 4.5% APR compounded monthly with a 0% fee. Product B offers 4.2% APR compounded daily but takes a 15% fee on interest. Which yields more?
Even if Product B has more frequent compounding, the fee can erase the difference. When you run the numbers, Product A may win because the net interest kept by the user is higher. This is why a consistent calculation matters.
Comparison Table: What to Watch
| Feature | Why It Matters | How to Model |
|---|---|---|
| APR vs APY | Compounding changes effective yield | Convert to common basis |
| Compounding frequency | More compounding slightly increases yield | Set compounds/year |
| Platform fee | Reduces interest kept by user | Apply fee to interest |
| Lockup period | Reduces liquidity and optionality | Compare to holding period |
| Interest paid in token | Price risk affects realized value | Not modeled; treat separately |
Lockups, Withdrawal Gates, and “Earned” Interest
Two products with the same mathematical yield can be very different economically if one has a lockup. A lockup reduces optionality: you cannot exit if rates drop, if a better opportunity appears, or if platform risk rises. Some platforms also impose withdrawal gates or cooldown periods. Those constraints are not expressed in APR/APY, but they are part of the real “cost.” When comparing offers, write down (a) lockup length, (b) withdrawal windows, and (c) whether interest stops accruing during a withdrawal period.
This calculator does not price that optionality. It treats your holding period as the period you keep funds on platform. If your lockup exceeds your desired holding period, you should treat the product as less flexible even if it yields slightly more.
Variable Rates and Repricing Risk
Many crypto earn products advertise a rate that can change weekly or even daily based on market demand. A 10% APR today may become 2% next month. For planning, it’s often better to use a conservative rate (for example, the 90‑day average) rather than the marketing headline. You can also run the calculator multiple times using low/base/high APR assumptions to see how sensitive outcomes are to repricing.
Taxes and Token Price Risk
In many jurisdictions, interest earned is taxable as ordinary income at the time it is received, even if you do not sell the token. If interest is paid in a volatile token, you can owe tax even if the token later declines. This calculator models interest in token units and does not compute tax; treat the output as pre‑tax. If you want an after‑tax view, apply your marginal rate to the interest earned and subtract it as a planning adjustment.
Limitations and Assumptions
This calculator is about rate mechanics, not risk. It assumes:
- The platform pays interest as described and does not change rates mid‑period.
- Interest is reinvested (compounded) at the same rate.
- Fees are applied as a percent of interest earned (not principal).
- Default, liquidation, rehypothecation, and platform insolvency risks are not modeled.
In crypto, those risks are real and can dominate yield. Use the output to compare offers, but pair it with a risk assessment (custody, transparency, reserves, legal jurisdiction, and withdrawal terms).