# APY

When you deposit tokens into the vault, you receive **receipt tokens** representing your proportional ownership of the vault’s assets.

Your receipt token balance remains constant. However, the **value per token increases over time** to reflect performance. In simple terms, your number of tokens does not increase - their value does.

#### How Yield Is Generated

APY is driven by continuous rewards generated across the underlying applications and protocols used in the strategy (such as lending, staking, or liquidity provision).

All rewards are automatically compounded back into the vault, increasing the share value over time.

#### How APY Is Calculated

APY is calculated based on **Oracle Reports**, which update the vault’s share price to reflect changes in asset value.

The calculation compares the share price from a past Oracle Report with the most recent report and annualizes the return over that period.

Formula:

```
currentReport = oracle.getReport(ETH)        # current block
initialReport = oracle.getReport(ETH)        # 1 day old block

apy := (
  (currentReport.priceD18 / initialReport.priceD18)
  ** (365 * 24 * 3600 / (currentReport.timestamp - initialReport.timestamp))
  - 1
) * 100
```

#### Claiming Receipt Tokens

Once your funds enter the vault, receipt tokens are generated and can be claimed via the Lido UI or Mellow UI.

Not claiming your receipt tokens does **not** affect reward accrual - yield continues to accumulate based on your proportional ownership of the vault.

#### Important Disclaimer

APY figures are estimates and may change at any time. Past performance does not guarantee future results.

Rewards are influenced by factors outside the platform’s control, including changes to blockchain protocols, validator performance, and market conditions.


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