Annualizing noise
A vault that gained 8% in a good fortnight can advertise a triple-digit APR. Annualizing takes a small sample and multiplies both the signal and the luck inside it.
The shorter the history, the more the headline number reflects market conditions rather than skill.
APR says nothing about the path
Two vaults can end the year up 40%. One drifted upward; the other doubled, gave back 55%, then recovered. Almost nobody stays deposited through the second path, which means most depositors never earn the advertised return.
Maximum drawdown, current drawdown and the share of positive months describe the path. Read those first.
Flows distort simple return math
Naive return calculations mix depositor flows into performance. We compute a time-weighted index instead, so a large deposit or withdrawal does not create a fake gain or loss.