# APY

APY stands for Annual Percentage Yield. This measures the real rate of return on your principal tokens amount by taking into account the effect of compounding interest. In the case of Cosmik Protocol, your tokens represent your principal, and the compound interest is added periodically on every Rebase event (Every 10 minutes).

The formula for APY = (1+R)^(tf)-1

* R = rebase rate&#x20;
* t = period of time
* f = frequency of compound rate in the unit of time selected&#x20;
