GLP Compound - Aged Vodka

GLP Compound has features of:

1. Reinvesting the ETH yield payouts from GMX into GLP

2. Reducing gas cost for users to claim and compound rewards manually

What is Auto-Compounding and What are the Benefits?

Auto-compounding refers to the automatic reinvestment of earnings into the original investment without any manual intervention from the investor, where in this case, Vaultka will be reinvesting the ETH payouts from GMX into GLP to grow users' investments.

With auto-compounding, rewards will be accumulated and generating higher yield with more accumulative underlying investment. Rewards can be illustrated in APY (Annual Percentage Yield), rather than APR (Annual Percentage Rate), providing a more accurate measure on the actual achievable rewards for user's deposit.

To illustrate how auto-compounding works, let's say you invest 100 ETH in GMX and earn a 20% payout per year. If you reinvest your payouts manually, your earnings will look like this:

Without Auto-Compounding in APR: 100 ETH + 20% payout = 120 ETH

Auto-Compounding in APY: 100 ETH + 22.1% reinvested = 122.1 ETH

Aged Vodka

The GLP Compounding vault is referred to as the Aged Vodka because it, like the Aged Vodka, exhibits the trait of improving results as time passes. Unlike a fixed APR, reinvestments trigger a compounding effect on rewards, resulting in exponential yield growth over time instead of a linear increase.

Approach

The GLP Auto-Compounding Vault will only accept deposits by the GLP token. Users can buy GLP tokens from the GMX page in order to deposit into the Aged Vodka Vault. The Vault will then automatically claims the ETH reward 3 times a day every 8 hours at UTC 0:00, UTC 8:00, and UTC 16:00.

All fees will be waived until 1st February 2024. After the date, management fees will be deducted before reinvesting the ETH payouts into GLP, where the fee will be dynamic based on the APR of GLP at that moment. Refer to the Fees & Parameters Page for more details.

Workflows

1. User deposits their GLP tokens into the Aged Vodka Vault a. User can buy GLP tokens from GMX with BTC, ETH, LINK, UNI, USDC, USDC.e, USDT, DAI or FRAX

2. ETH rewards will be released on GMX every block based on User's GLP deposits

3. Vaultka Smart Contract triggers the claim and compounding function 3 times a day, and reinvest the ETH payouts to buy more GLP

4. The repurchased GLP will be staked, thus growing the initial investment