The Power of Compound Earnings in Pools - a HIVE/PIZZA Study

in LeoFinance3 months ago

ok so I recently found out that despite what I had been told that you can add new capital back into the pool and it won't disrupt your payout for that day, however, your extra capital won't be counted to the next day.

So best case you should add your earnings back into the pool every day, this is going to boost the APR as the current APR is calculated on a fixed amount being added, not re-adding those sweet earnings back in. However every day can be tiring so I am working out a few things, how much more do you make reinvesting and what is the impact of reinvesting every day vs. every 2, 4 ,8 , 16 days or monthly , 2 monthly or 4 monthly ? If this gets an ok reception ill try it with different pools as APR is going to affect the outcome. Feel free to suggest one for next time!

Ok some rules

  1. Principle starts at $100 , just makes it easier to work out APR at the end
  2. I am assuming you can liquidate the rewards and reinvest back into the pool. I know some pool payout in their pairs but most payout in a range of rewards, but for this approach we can cash out and reinvest in
  3. Adding to the pool does not dilute the rewards - I am assuming the pools are big enough to not really effect the APR with some more capital.
  4. Bonus daily APr is not counted, might add this in later if it is of intrest
  5. The payout days is a year, just makes it easier, again if this is important ill modify
  6. Token values are not changing, i know it will but how can we predict it

HIVE/PIZZA lets go !

Ok so I choose this as it was my very first APR pool so it has a sweet spot for me. It has an APR of 50.551% or 0.14% a day. Yes it pays out in a range of sweet tokens but I am going to sell it all and get back in!

Total Earning over time

Ok first we can see that any extra reinvestment is going to work well for us

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You can also see in Q4 that doing a reinvestment every few days does not have much diffrence from every 4 month at the start but by the end that extra compound intrest really spreads out the earnings

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Change in APR

Ok so if we reinvest every single day we boost the APR from 50% to 64.82% a 30% improvement which is really really nice! But the difference in reinvesting every day or every days is marginal, really you could do it every 8 days and only lsoe $0.4 over the whole year. Given that time has a cost in itself i woudl suggest reinvest every 7 days or so.

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Well thats my wrap up for now, but really open to thoughts, ideas or suggestions

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It would be cool if you could figure out how the bonus shares actually behave when re-investing + do the calculations to see if daily reinvestment is still optimal.

I do reinvest daily, at least the Tokens that I can directly reinvest. It is fun like some sort of idle game and I also have more than $100 in the pools, so...

We actually made a bot with which you can see all the shareholder of the Diesel Pools. You can find the bot on our Discord https://discord.gg/h6jMXhY9. But you need to unlock it with a small dono to @quekery first :).

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Woah that is awesome I have been looking for that mechanism, how much !!!

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Interesting study, where are these pools found?

Great thank you:)

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