Same dollar discount, swept across standard auction maturities
Face value and the $ discount held at your inputs; only the term length changes. Shows how annualizing turns one flat discount into very different quoted rates.
| Term | Clearing price | Simple APR | Compounded APY |
|---|
Clearing price, not a posted rate
For converting an already-known rate between conventions, see the APY to APR calculator E Convertitore APY/APR; for the vault-side view of yield that isn't a straight-line rate either, see the DeFi options vault APY E Rischio del caveau delle stablecoin calculators. This tool is specifically for the auction-cleared, discount-to-par mechanic used by on-chain term-lending protocols.
Why term-auction lending prices a loan instead of quoting a rate
Variable-rate money markets like Aave or Compound post a supply/borrow rate that moves along a utilization curve — you always know the rate before you deposit or borrow, and it can change every block. Term-auction protocols such as Term Finance (and the older fixed-term primitives, Notional's fCash and Yield Protocol's fyTokens) work the opposite way: the rate doesn't exist until the auction clears. Borrowers post collateral and submit a bid — the maximum they'll repay at a fixed future date for a given amount borrowed today. Lenders submit an offer — the minimum they'll accept today for that same fixed repayment later. The protocol sorts all the bids and offers, finds the single price at which supply and demand of collateralized loan volume match, and clears every matched participant at that one uniform price. Everyone who transacts in that round gets the same rate, discovered by the auction rather than read off a curve.
That clearing price is a discount to par, exactly like a Treasury bill: you fund $9,800 now and are owed $10,000 at maturity, and the $200 gap is the entire return — there's no separate coupon. The tricky part is that this $200 discount can be expressed as several different annualized numbers depending on convention, and none of them are wrong, they're just measuring different things. Bond-equivalent (simple) APR divides the discount by what was actually paid, then annualizes over a 365-day year — it's the honest yield-on-cost number. Bank-discount yield, the T-bill market convention, instead divides the discount by the face value and uses a 360-day year, which structurally understates the true yield by dividing by a bigger number over a shorter year — useful for comparing against other money-market instruments quoted the same way, but not what a lender actually earns on capital deployed. Compounded APY takes the same clearing price and assumes the position rolls every maturity for a year, which is the closest analogue to a DeFi \"APY\" figure and is always the largest of the three numbers for a given trade.
The borrower's side adds one more wrinkle most dashboards don't surface: the clearing price sets what the lender pays and what the borrower repays at maturity, but the borrower's actual proceeds are usually a touch lower than the clearing price once the protocol's origination or matching fee is deducted at funding. A borrower who receives $9,790 instead of the full $9,800 clearing price, while still repaying $10,000 at maturity, is paying a real fixed rate measurably above the lender's quoted yield — the same gap in spirit as a bond's yield-to-maturity versus its coupon rate, except here it comes from a fee line most UIs bury below the headline auction rate. That's the number this calculator is built to surface on both sides of the trade.