Recently I realized something that confuses most people in DeFi: they don’t understand what the actual net APY of their account is.

Many see 6% here, 4% there, and think that’s what they’re earning. But no. The net APY is completely different. It’s your entire account summarized in a single number.

Think of it this way: your dashboard is like a balance sheet. On one side, you’re earning interest. On the other side, you’re paying for what you borrowed. The net APY only answers one question: am I earning more than what all this costs?

The math is simple. For each deposit, multiply the amount by its rate. Add everything up. Then do the same with the loans and subtract. Divide the final result by your total deposits. That’s your actual net APY.

Let me give you an example I saw recently. Someone deposited $1,000 in USDT at 6%, $500 in TRX at 4%. That gave them $80 in earnings. But they also borrowed $400 in USDT at 10%, which cost them $40. Their total deposits were $1,500. So their actual net APY ended up being approximately 2.67%.

That’s where people get scared. They see the net APY drop even though the individual percentages look good. Some think something is broken. But nothing is broken. The math just changed because the positions changed.

That’s what no one explains to you. Your dashboard may show high rates everywhere, but your actual account performance is the net APY. One number. Just one. And that number already includes absolutely everything you did. That’s why it’s important to understand it well.