Key takeaways:
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Automatic Compounding:
- Rewards are compounded daily based on the pool’s APY over a 365-day cycle.
- Compounding occurs when specific user actions—such as deposits, withdrawals, or claims—are made, or when a user claims the compound bounty.
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Harvest Fees and Reinvestment:
- Harvesting rewards incurs a small fee, and the remaining rewards are reinvested into the Vault, increasing the total balance.
- This reinvestment amplifies returns by compounding rewards for all participants in the pool.
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Rewards for Active Pools:
- Rewards are calculated for staked tokens in active pools. If the lock period is over and the pool is not expired yet, staked tokens will still earn rewards.
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Lock Periods:
- Pools generally have a lock period (e.g., 30 days), during which withdrawals are restricted.
- After the lock period, users can withdraw their share, including compounded rewards, ensuring commitment and stability in the pool.
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NFT Reward Boost:
- Users holding eligible NFTs receive a reward multiplier, increasing their proportional share of the pool’s compounded rewards.
- Multipliers, such as 2x, provide additional earnings beyond the standard pool rewards.
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Proportional Ownership:
- Each user’s share of the Vault is determined by their contribution relative to the total deposits.
- Rewards are distributed proportionally, ensuring fairness among participants.
User Interaction Flow in Compound Pools
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Deposit Tokens:
- Users deposit tokens into the Vault, which then stakes the funds in the MasterChef pool.
- The Vault acts as a single user, consolidating all participant deposits for efficient reward compounding.
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Claim Rewards:
- Users can claim their proportional share of rewards after the lock period ends or when withdrawing their stakes.
- Rewards are calculated based on the user’s share and the compounded Vault balance.
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Trigger Harvesting:
- Any user can trigger a harvest, which claims rewards for the Vault and reinvests them.
- The user triggering the harvest is incentivized with a small bounty, while the rest is compounded for all participants.
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Withdrawal After Lock:
- After the lock period, users can withdraw their stake and rewards.
- Withdrawal includes their share of the compounded Vault balance, reflecting the amplified returns.
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Reward Multiplication via NFTs:
- Users with eligible NFTs receive a multiplier on their rewards, calculated during claim or withdrawal.
- This feature incentivizes NFT ownership and enhances overall earnings.
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Example:
User A starts by depositing 100,000 DCB into the Vault. The Vault then stakes this amount in the MasterChef pool, which has a 12% APY, a 2x NFT boost multiplier, and a 30-day lock period. Shortly after, User B deposits 50,000 DCB, bringing the total Vault balance to 150,000 DCB. Then, User C deposits an additional 100,000 DCB, raising the total Vault balance to 250,000 DCB.
Each user’s ownership share of the Vault is based on their deposit: User A owns 40% of the Vault, User B owns 20%, and User C also owns 40%.
One day after these initial deposits, User D triggers a harvest of the Vault’s rewards. Since the MasterChef pool’s APY is 12%, the reward for that day is calculated by dividing 12% by 365 days and then multiplying by the Vault’s total balance of 250,000 DCB, resulting in approximately 82.19 DCB. A 0.25% harvest fee is applied, so 0.205 DCB is paid to User D for harvesting, and the remaining 81.98 DCB is reinvested into the Vault. This reinvestment increases the total Vault balance to 250,081.98 DCB.
Fifteen days after the initial deposits, User C tries to withdraw but cannot because the 30-day lock period has not yet ended. Once the lock period expires, User C attempts to withdraw again. At this time, another harvest takes place, increasing the Vault’s balance to 252,459.4 DCB. Since User C owns 40% of the Vault, they receive 100,983.76 DCB upon withdrawal.
If User C holds an NFT that qualifies for a 2x multiplier, their reward is boosted. In this case, their additional reward is calculated as double the compounded portion, so they would receive 101,967.52 DCB, including the base amount and boosted reward.