Crypto Interest Rates Explained

Where the yield comes from, why stablecoins pay more, what APY and APR actually mean, and which risks deserve a second look before you deposit anywhere.

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Where Crypto Interest Comes From

Someone is borrowing it

Interest is not created by the platform holding your deposit — it is paid by someone who wants to borrow. Traders borrow stablecoins to take positions, market makers borrow to provide liquidity, and businesses borrow to bridge settlement. They pay for that access, and part of what they pay reaches depositors as interest. This is why crypto rates move: when borrowing demand is strong, deposit rates rise; when it cools, they fall. It also explains why a rate quoted as a permanent figure should be treated with suspicion. A provider that publishes yield without explaining the demand behind it is asking you to accept a number on trust.

APR — the simple rate

APR is the annual rate before compounding is taken into account. It answers a plain question: what does this pay over a year, ignoring what happens to the interest along the way? Fixed-term savings are usually quoted this way because the term and the rate are both known upfront.

APY — the compounded rate

APY includes the effect of interest earning interest. For the same underlying rate, APY prints slightly higher than APR, and the gap widens the more often compounding occurs. Flexible savings are usually quoted as APY because interest is credited continuously into a balance that keeps earning.

Comparing them honestly

An APY on one product and an APR on another are not directly comparable, and the difference can be enough to flip which option looks better. Check which unit is being quoted before you compare providers — a higher-looking figure is sometimes only a different measurement.

Product	Current rate	Access
Flexible savings	5.2% APY	Withdraw anytime. T&C apply
Fixed savings	Up to 8.2% APR	Term of 1 to 12 months
Top savings rate	8.2% APR	Whichever plan currently leads

Current rate: 5.2% APY
Access: Withdraw anytime. T&C apply

Current rate: Up to 8.2% APR
Access: Term of 1 to 12 months

Current rate: 8.2% APR
Access: Whichever plan currently leads

Why Rates Differ Between Assets

The same platform can pay noticeably different rates on different assets. The reasons are structural rather than promotional.

Stablecoins pay more

Borrowers overwhelmingly want dollar liquidity. That demand is steadier and stronger than demand for major coins, so stablecoin depositors are paid more.

Major coins pay less

Assets like BTC are more often held than borrowed. Thinner borrowing demand means a lower deposit rate, even where the custody and terms are identical.

Terms shift the rate

Committing funds for a set period is worth more to a lender than money that can leave at any moment, so fixed terms generally price above flexible access.

Market conditions move everything

Rates across the whole category rise and fall with borrowing appetite. A figure that stays frozen is a marketing decision, not a market outcome.

Savings interest

Paid by the provider out of lending demand. Available on assets that have no staking mechanism at all, including stablecoins, and the rate is shown before you commit. The counterparty is the provider, so their custody and terms are what you are assessing.

Staking rewards

Paid by a blockchain network for helping secure it. Available only on proof-of-stake assets, with rewards set by protocol rules rather than by a company. Unstaking periods are set by the network and can keep funds locked regardless of who you use.

Market risk stays with you

Interest is paid in the asset you deposited. If that asset falls in value, a healthy rate does not make you whole — a point that matters far more on volatile coins than on stablecoins.

Counterparty risk is real

You are relying on the provider to meet its obligations. This is why custody arrangements and the terms covering deposits deserve more attention than the headline figure.

Rates are not promises

Flexible rates move with market conditions. A fixed term is the mechanism that removes that uncertainty for its duration — that is precisely what it is for.

Access has a cost

Higher rates generally accompany commitment. Deciding how soon you might need the funds is a more useful starting question than asking which number is largest.

Terms deserve reading

Withdrawal conditions, minimums and what happens at the end of a term are all knowable in advance. Anything discovered after depositing was avoidable.

Tax applies to earnings

Interest earned on savings may be taxable depending on your jurisdiction. Clapp does not provide tax advice — consult a tax professional in your jurisdiction.

*All rates, terms, and conditions are subject to change. Additional terms and eligibility requirements may apply.

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Need help? Clapp's support team is available around the clock to answer questions about rates and terms.

Crypto interest questions

From borrowing demand. Traders, market makers and businesses pay to borrow crypto and stablecoin liquidity, and part of what they pay is passed back to depositors as interest. When borrowing demand cools, rates fall — which is why any honest rate has to be quoted as current rather than permanent.

APR is the simple annual rate before compounding. APY includes the effect of compounding, so for the same underlying rate APY looks slightly higher. Comparing an APY on one product with an APR on another is not a like-for-like comparison.

Borrowers want dollar liquidity. Demand to borrow stablecoins is consistently stronger than demand to borrow major coins, and stronger demand means a higher rate paid to depositors.

No. Staking rewards are paid by a blockchain network for helping secure it, and they depend on that protocol. Savings interest is set by the provider from lending demand, and it can be offered on assets that cannot be staked at all.

On Clapp savings, interest accrues and compounds daily, credited in the same asset you deposited.

It depends on the plan you choose.

Flexible Savings: deposit and withdraw any amount, anytime — no lockups, no penalties. T&C apply

Fixed Savings: lock in a guaranteed rate for a term of 1 to 12 months. Your rate is fixed upfront and never changes. T&C apply

See the Current Rates for Yourself

Now that the mechanics are clear, the figures are worth checking directly. The top savings rate on Clapp right now is 8.2% APR.

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