What is the Goblins Compoundor Podcast
The Goblins Compoundor: Automating Liquidity Fee Compounding
The Goblins Compoundor simplifies the process of compounding liquidity provider (LP) fees within the Goblins ecosystem. Unlike Uniswap v3, which requires manual compounding, the Compoundor automates this task, reducing the complexity and time involved.
Manual Compounding Process:
- Collect fees through the NFT Manager contract.
- Determine the required amounts of token0 and token1.
- Perform necessary swaps.
- Add tokens back to the liquidity position.
Challenges:
- Fees grow at varying rates, requiring constant monitoring.
Our Solution:
The Compoundor automates fee compounding by incentivizing participants to cover gas costs in exchange for 1% of the accrued fees. This system ensures frequent compounding based on uncollected fees and network gas prices.
Key Features:
- Incentivized Automation: A fixed fee percentage encourages participants to perform compounding tasks, easing the manual burden on LPs.
- Self-Compounding: Position owners can compound their fees directly by calling a contract function and paying gas fees, with no additional charges from the protocol.
Tips and Considerations:
- Efficiency: The Goblins Compoundor maximizes returns by ensuring frequent and efficient compounding.
- Cost-Effectiveness: Assess gas costs to confirm that compounding benefits outweigh expenses, particularly in volatile markets.
- Monitoring: Although automation reduces oversight, regularly checking gas prices and liquidity position performance can further optimize returns.
By using the Goblins Compoundor, LPs on the Goblins platform can enhance their returns with minimal effort, ensuring that liquidity fees are compounded efficiently.