How is the APY calculated?

The Annual Percentage Yield (APY) displayed on Ern is a variable rate derived directly from the supply and demand mechanics of the third-party lending protocols used on the Ethereum Mainnet. This rate is not set arbitrarily by the Ern team but is determined by the active market rates for borrowing USDC or USDT within the DeFi ecosystem. The platform updates the "Current APY" hourly to provide a real-time snapshot of the annualized return currently being generated by the underlying smart contracts.

Daily earnings are calculated by applying this variable annualized rate to the user's stablecoin principal, pro-rated for the 24-hour period. Unlike standard compounding accounts where interest is added back to the principal balance, Ern automatically converts the accrued stablecoin yield into Wrapped Bitcoin (wBTC) for the daily payout. Consequently, the specific amount of wBTC a user receives depends on both the prevailing lending interest rate and the spot conversion rate between the stablecoin and Bitcoin at the time of distribution.