There will always be a discrepancy between the APY that you see in the SwissBorg app, and the APY that is displayed directly on the DeFi platforms the yield is coming from. The reasons for this are unfortunately outside our control, but we’re happy to provide some more insights regarding this.
APYs on DeFi platforms can change a lot in a very short period of time. This doesn’t mean that the platform is unreliable, it typically just reflects their current incentives policy. The fees on a decentralized lending platform usually follow a hockey-stick model, meaning a sharp increase in APY after a certain threshold is reached in the utilisation rate of the assets in the pool. This is meant to incentivize new liquidity to the pool.
There are many other reasons for a difference in APY rates to occur, and one of the more common ones is that platforms use a moving average for their APY. This means that if there is a sudden drop or rise in the APY, it will only be reflected in the displayed number after some time, while the yield you are receiving will reflect that immediately.
It is no secret that everyone looks at the APY rate when visiting DeFi platforms, and for that reason some platforms may portray the rate as high as possible, just to make it more attractive for potential investors. It is important to confirm the crypto asset in which the yield is paid out. A lot of platforms will pay out the yield in their native token, and not the underlying asset. Therefore, it is crucial to know the current value of said token when calculating the APY.
Another common reason is that on most platforms the APY rates are merely approximations based on past performance, and do not indicate future results. Since investors can usually withdraw funds from liquidity pools at any time, the yields get distributed among different amounts of capital.
The difference can also be caused by the fact that DeFi platforms will frequently charge a certain fee over the yield rewards, that is often excluded from the displayed yield rate and should be taken into account.
The yield earnings that you receive in the SwissBorg app are the average amounts over the last yield period, which is typically 24 hours.