How to Understand APY Fluctuations When Supplying Assets
APYs in Teller pools are variable and fluctuate based on lender activity, borrower activity, and loan rollovers. Understanding these shifts helps explain why earnings change when supplying assets.
What is APY and Why It Fluctuates?
APY stands for Annual Percentage Yield — it’s the projected annualized return for suppliers based on current rates and utilization.
Teller pools' APY is driven by three main factors:
- Liquidity Supplied: When more assets enter a pool, APY typically lowers because returns spread across a larger base.
- Borrow Demand: Increased borrowing boosts APY, as more interest flows back to suppliers.
- Rollover Activity: As borrowers repay and re-borrow during rollover checkpoints, interest recalculates, updating APYs.
All Teller pools have their own Liquidity chart showing recent yield history - visible upon clicking any specific token pool.
Example Scenario
- A pool holds $136k in USDC at 22.40% APY.
- Another $100k is added. APY drops to 12.9% because the same interest revenue is now spread across $236k.
- A borrower takes out a large $80k loan. APY rises to estimate 16.29% as interest income increases relative to total supply.
- During the $8ok loan rollover checkpoint, APY recalculates based on actual repayments and new loan volumes.
The history graph shows how volume (green) and collateral (blue) fluctuate over time as borrowing increases.
FAQ
Why does APY go down after I supply assets?
When supply increases without a matching increase in borrowing, the interest earned spreads across more liquidity, which lowers APY.
Why does APY spike sometimes?
Large borrow events or rollovers can cause temporary increases in utilization, which raises APY until supply adjusts.
Does APY mean guaranteed returns?
No. APY is variable and changes in real time as borrowers and lenders interact with the pool
About Teller
Teller enables loans for Bitcoin and 100+ alts. Understanding APY fluctuations helps suppliers make informed decisions and see how yield evolves over time — a core benefit of using Teller.