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

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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.

This time I decided to look into the biggest pool out there, DEc/HIVE!

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

*# This time I took on a suggestion for @thatgermandude and worked in the APR daily bonus if it applys, now I had trouble finding info on this so please correct me if wrong but I have assume the daily bonus applies by making your stake larger and this % grows each days. Worked example a 1% daily bounse on a 100 intial stake with no reinvestment would make it appear like 101 stake the next day and 102 the following day and so on, this of course affects your payout each day as it appear like you own more of the pool ( offset by everyone else getting the same effect but lets ignore that for now)

HIVE/DEC lets go !

Ok so I choose this as it is the biggest pool in the tribal dex, most likely becuase of that double points you get towards the SPS airdrops. It has an APR of 2.99% or a 0.01% day. It also has a 1% daily bonus which has a real impact so I am going to show the impact of both daily bonus and no daily bouns

Total Earning over time

Ok so we are not looking at a lot of earnings here, but really its more about SPS drops.

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And really even in the last quarter there is not much spread between doing nothing and reinvesting every day

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Even if we turn off daily bonus, the APR is so low it does not really matte that much

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Change in APR

So the change in APR is really small here so reinvesting is not really a big deal. However what we can really see is the difference of that daily bouns! It jumps the APR from a best of 3.03% up to 8.79% !! Again I temper this with the thought that if everyone grows together your still sharing the same pie.

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