APY (or Annual Percentage Yield) refers to the interest received for the cryptocurrency that is loaned, expressed as an annualised percentage. Swyftx offers a tiered model of interest, with interest rates decreasing at each incremental tier. By way of hypothetical example, say you hold 50,000 units of cryptocurrency X that has the following tiered model of APY rates:
• Tier 1 (0 – 10,000 units): 10% APY
• Tier 2 (10,000 – 20,000 units): 8% APY
• Tier 3 (>20,000 units): 6% APY
Under this hypothetical scenario, the following APY rates would apply to your balance of 50,000 units:
• 10% APY would apply to 10,000 units (first 10,000 units under Tier 1)
• 8% APY would apply to 10,000 units (second 10,000 units under Tier 2)
• 6% APY would apply to 30,000 units (remaining 30,000 units under Tier 3)