APR (Lending)
The annualized percentage rate of interest earned or paid in DeFi lending, excluding compounding.
What is APR (Lending)?
APR in DeFi lending represents the annual interest rate for supplying or borrowing digital assets, calculated without compounding. For example, a 5% APR on a $1,000 USDC deposit yields $50 annually. Borrow APRs, like 7% on Aave’s DAI loans, reflect borrowing costs. Rates vary with utilization, often displayed transparently on protocol dashboards.
In 2025, APRs for stablecoin lending range from 3–6%, while volatile assets like ETH can hit 10% during high demand, per DefiLlama. Unlike APY, APR doesn’t account for reinvested earnings, making it a simpler metric for short-term comparisons.
Related Terms
Market Maker (order book)
An entity providing liquidity by placing buy and sell limit orders in the order book.
Liquidity Provider and LP Token
Entities supplying assets to DeFi pools for trading, receiving LP tokens as receipts for proportional rewards.
Meme on Solana
Humorous digital assets on the Solana blockchain, often inspired by internet memes, leveraging low fees and high speed for rapid launches and trading.
Primary Dealers
Designated financial institutions authorized to trade directly with the Federal Reserve Bank of New York in government securities, numbering 24 as of 2025.
Rollup Validity Proof
A security mechanism for Layer 2 solutions that verifies batched transactions off-chain using cryptographic proofs submitted to the main blockchain.
Liquidity Pool (Perp Dex)
A pool of digital assets provided by users to facilitate trading on a Perp DEX.