This is actually the more complicated topic to talk about. The easiest way to find a DeFi application’s APR and APY is to visit the
DeFi application frontend and check the numbers that they list.
For example, if you are interested in putting your stablecoins to one specific DeFi application, most likely they would show you the APY number from the moment you connect your web3 wallet to their frontend.
Compare the DeFi application’s APY to other existing DeFi applications, and you will find out which one has the more attractive APY.
One crucial thing to remember is that not all APY numbers listed on DeFi application websites are accurate. As we have mentioned above, the real APY calculation will differ depending on the compounding frequency.
A DeFi app that allows you to claim reward every one hour will provide higher APY compared to another DeFi app that only allows you to claim reward every one month, considering everything else is equal.
The thing is, occasionally, some DeFi apps might not be transparent about the reward claim frequencies (how often you can claim every day, how often you can re-stake the reward etc.). Make sure you always test everything with a smaller amount of funds before you commit serious money.
Another important point to consider. Many DeFi apps calculate the APY in their own native crypto token’s valuation instead of the predicted yield in stablecoin or fiat currency value. Just like the previous advice, you should “test the water” by using smaller amounts of funds, to avoid miscalculation. Only commit a larger amount of funds after you figure everything out.