Previously known as "Compound"

Auto-compounding strategies help an investor automatically earn optimized yields through a target platform strategy.

How does it work? The users' funds are first deposited into a target vault or staking pool. The target platform utilizes yield-optimizing strategies to enhance returns which increases the value of deposits. They also reward depositors with native tokens, which Feeder Finance then auto-compounds again for additional returns.

Strategy Benefits and Risks

No investment, whether in DeFi or the physical world, is truly risk-free.

Users of Compound benefit from convenience and automation by removing the manual aspect of compounding rewards thanks to target platform auto-compounding. Staking pools and/or vaults typically mint rewards to attract TVL to their platform. However, most do not automatically compound their rewards because they encourage users to keep them and become long-term holders. Feeder Finance appreciates that, and users who wish to be long-term holders should not auto-compound. Others that look for higher APYs, however, would benefit greatly from compounding.

APYs coming from platform rewards harvesting typically experience wild swings due to their direct linkage with the price of reward tokens. In other words, as target platform tokens rise, so does APY, and vice versa.

Last updated