How Does APY Work?
APY is the annual percentage yield offered from a particular investment. This takes into account compound interest, giving you an accurate idea of your returns compared to simple interest.
Large APYs in the percentage of thousands are possible with investments that provide daily yields of 1-2%. Due to your liquidity pool rewards being constantly farmed and reinvested, the interest compounds on larger and larger amounts.
Here is a link to an APY calculator so you can plug in some values yourself to plan your investment strategy : https://www.omnicalculator.com/finance/apy