What is APR ?

APR stand for annual percentage rate, which mean how much you would earn in terms of a year. It's like when you had 100 bucks, and next year at the same date, you would had 120, which mean you get 20 bucks in a year from 100 bucks, so you had that 20/100 or 20% APR. Easy isn't it ?

Different in Crypto and The Case

If it seems easy in fiat or normal situation, things are a bit complicated in cryrpto, why ? because it's value are not stable like Fiat. You can expect a low inflation from fiat, but in crypto, you might lose more than 90% of it's value in just few days. So there is a chance you might get more than 100% APR which mean your token is doubled next year, but you are losing money.

Let me explain you, I will take an example of the most famous gave in hive, splinterlands. I took a snapshot of splintershard's price from coinmarketcap

As you can see at the chart above , the price of SPS is declined around 73% for exactly 1 year ago. This mean if you bought sps with 100$ last year, it's ended up with just around $27 today. And even if they gave you 100% APR, it's worth just around $54. So yeah, APR is counted for the specific token, but how much it's worth after a year is completely different things. You will be okay if what you are looking for is the token, but if you try getting profit in fiat, then you had to think twice about the future's price of the token before investing on there.

The Opportunity

Is investing in crypto always that bad ? Well no, that's why there is new rich people out there cause of crypto. I know I'm not one of those people, but after being in crypto world in last few years, I recognized that crypto's investing having some positive side in it :

1. Capital gain potential.

Not just the APR from staking or renting, we could get massive capital gain as well, especially when you enter is as an early adopter. A bit risky ? yes, but it's offer great return, because if you found a great project, and believe it will attract people, than you had a chance to get some profit from it. This is because the price will pump when the mass is enter the project. But be carefull, when the peak is there, makes sure you are not holding it for too long, because once there is no new user coming in, or the whales are stop making progress, there will be the time the price will fall off. Unstaking time is important because it's often we need time to get our asset into a liquid one. SPS required 4 weeks to fully unstaked (1/4 each week), while Hive power is required 12 week (1/12 each week).

2. Compounding potential.

If we talked about the stock, we might get the devident once a year, maybe 2, or 4 at maximum, but in crypto, we could get it daily ! But it's depend on the airdrops given, sometimes it's weekly, or monthly, but most of it is daily. We could get delegating HP as example, many curator offers return for the daily curation reward, and sent us the reward daily. Does it really matter ? well, it does !
With daily rewards/ airdrops, we could reap profits more than the APR given, because we could stake more token every day. So our token increased as much as APR/365 everyday, and it will cause our total APR improved !

Conclussion

APR are often gives us excitement due to it's high return, but we need to keep in mind that the APR given in form of token, and it's value could changed over time, we could getting doubled token but reduced value. But investing in crypto also had opportunity such as high capital gain potential and the compounding potential because it's often given every day. And don't forget to do research before investing on any kind of crypto !

Final Words

Credits
Hive account@splinterlands for the cool game
Hive account@peakmonster for the cool card rent platform
Splinterlands Indonesia Community for makes this game even fun
Electronz for the solid guild
Mrs. carrieallen for the very useful ULTIMATE Markdown Tutorial
Hive account@marianaemilia , Hive account@arcange , Hive account@fengchao for keep supporting my post
Hive account@oadissin for reblogging my post
Canva and Photopea for the free photoshop
Ezgif for video to gif converter
All curators and readers that i couldn't mentioned all of your name

~Thank You~