Are Anchor's yields exponential?

I’ve noticed that Anchor display’s its returns as APY, but as I understand, aUST is a yield bearing asset accruing 20% a year. That sounds more like 20% APR not APY, or am I missing something?

Yes, 19.5% APR and 21.3% APY.

So do I have to manually take my profits and re-invest them? It doesn’t make any sense because I’m just buying back aUST

No, it’s auto-compounding.

It’s actually 19.5% APY auto-compounded, you can check the website as it clearly states APY, the APR is lower.

Ah, you’re right.
A bit confusing since Anchor is advertising its yield as 20% APY everywhere.

But how? Due to Anchor giving me aUST, the yield is directly tied to it. If the yield was exponential, aUST would be increasing by more that 20% a year… Do they periodically give me more aUST as a result of me having some?

No. The value of aUST expressed in UST increases every 8 seconds I believe. You can see your UST value increasing several times per minute. The aUST number remains constant.

Yeah that’s what I mean. If aUST was to follow an exponential curve, the value of aUST, say in 5 years, would not be 20%, but would be way way more, due to compounding. aUST has a accruing value which is linear. This brings me back to thinking it’s APR and not APY…

You are right that it’s a straight line.

See the last graph here

so that means that Anchor’s yield is actually linear and not exponential?

If you deposit 1000 UST today, and we assume a 20% APY, in one year you’d have roughly 1200 UST after that it’s 1440, then after that 1728…

The indexed value of aUST grows close to linearly as the APY tracks the 19.5%, but every year you’d get the yield and more and more UST.