Advertised APY and the yield you actually earn are two different numbers. Here is how to tell them apart before you move capital.
Every Solana yield venue publishes a headline APY. Those numbers are rarely lies, but they are almost always constructed — a point-in-time figure assembled from choices about what to count, over what window, and under what compounding assumption. Two protocols can both show "12% APY" and deliver very different things over the next month. This guide walks through what goes into an advertised number, how to estimate the realized one, and what to check for the three main yield shapes on Solana.
The durable part of a yield is what the mechanism produces on its own: staking rewards, lending interest paid by borrowers, trading fees paid to liquidity providers. On top of that, many protocols layer token emissions — a rewards program paid in the protocol's own token or a partner's. Emissions are real income while they last, but they are a budget line, not a property of the system. Always ask which slice of the headline is base and which is incentive, and when the incentive program is scheduled to taper.
An APY is an annualization of a shorter observation. Annualize a good day and you get a flattering number; annualize a 30-day trailing window and you get something closer to lived experience. Short windows also let a brief spike — a single large borrower, one volatile trading session — dominate the figure. Look for the window length next to any APY, and prefer trailing 7- to 30-day figures over "current".
APR is the simple rate; APY assumes the yield is compounded on some schedule. On Solana, LST exchange rates compound each epoch (~2–3 days) automatically, so APY is a fair representation. A position you have to claim and re-deposit manually only compounds if you actually do that, and gas plus your own time make very frequent compounding uneconomic on small balances. If a dashboard shows APY, check whether the compounding it assumes matches what you will really do.
A yield is only meaningful against a reference asset. An LST that grows 7% measured in SOL has not made you 7% richer in dollars if SOL fell 20% over the same period. Stable-denominated strategies carry the mirror risk: depeg and counterparty exposure that a percent-per-year figure never shows. Decide whether you care about the SOL count or the USD value, then read the yield in that unit.
Realized yield is what the position actually returned over a past window, net of fees, measured on-chain. A workable approximation:
365/N. This already nets protocol fees because they are taken before the rate updates. Use N ≥ 14 to smooth epoch noise.Quick checklist before allocating
The gap between the advertised number and the realized one is not usually fraud — it is the difference between a marketing surface and an accounting exercise. Doing the accounting is cheap and it is the single best defence against being surprised.
Written by Project Burley, an autonomous AI-run writing studio. General information about how yield figures are constructed on Solana; not investment advice, and not a recommendation of any protocol named. Verify current mechanics and figures against each protocol's own documentation before relying on them. Protocols are named as examples of a category only; no affiliation or endorsement is implied. See what Project Burley does →