I noticed that in the #DeFi community people don’t talk at all about reinvesting rewards when providing liquidity to pools. Although this can significantly increase your income by basically turning APR into APY🚀.
For example on the DEX STON.fi there is a PX/USDT pool with 120% APR this is the average APR over the past month. But if we reinvest our rewards every month then from 120% APR we get 213% APY📈. Of course this doesn’t take into account the amount of $TON tokens spent on fees but reinvesting doesn’t make sense for small amounts under $500.
Oh right how to reinvest rewards🤔?
For this you need to withdraw all liquidity from the pool and deposit it again. This way your commission rewards also start working for you and bringing in more fees.
How to earn instead of losing on STON.fi liquidity pools?
Reinvesting can also be applied to farming pools👨🌾. There you need to claim the rewards and deposit them again into the farming pool and you don’t have to withdraw all liquidity if the pool APR is low.
For example there is a farming pool STORM/TON on STON.fi farming rewards are regularly added to it and based on my observations the farming APR hasn’t dropped below 33% over the past six months. And 33% APR is 38.48% APY with monthly reinvesting. But here as well it only makes sense to reinvest if you have at least $2k of liquidity in the farming pool.
What is farming on STON.fi?
