# How APR and APY Are Calculated

####

### **1.Snapshots every hour**

We take a snapshot of the vault every hour to track:

* Total vault value (USD)
* New deposits and withdrawals (USD)
* Fees/rewards earned since the last snapshot (USD)

This helps us calculate accurate returns, even when deposits or withdrawals happen.

### **2.Detecting large deposits**

If a deposit is more than 20% of the vault’s previous value, we consider it a **material deposit**.

* Snapshots during and shortly after large deposits are temporarily **excluded** from APR calculation to allow the vault time to deploy the new funds.

### **3. 24h rolling APR**

$$
7\text{-Day Average APR} = \text{AVERAGE}\big(\text{All 24h Rolling APR in the last 7d}\big)
$$

This shows the annualized return based on the past 24 hours.

### **4.7-Day Average APR**

We take the **average of all 24h rolling APRs** over the last 7 days to get a smoother, more reliable number.

### **4. APY (hourly compounding)**

$$
7\text{-Day APY} = \left(1 + \frac{7\text{-Day APR}}{8760}\right)^{8760} - 1
$$

`8760 = 365 days × 24 hours`

* This accounts for **hourly compounding**, giving the real yearly return if earnings are reinvested every hour.


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