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Understanding Blueshift’s Yield Pool

Dec 15, 2023

On the Blueshift’s decentralized exchange, there are two yield pool options: Auto HODL and Manual. This article will go through the differences to give you a better understanding of which option would be better for you.

Auto HODL Pool

The Auto HODL Pool enables staking BLUES tokens with automatic rewards compounding and additional HODL rewards. It benefits long-term stakers, especially if someone unstakes early, but withdrawing early leads to loss of some rewards.

The rewards in the Blueshift Auto HODL Pool depend on how long you stake BLUES tokens and if others unstake early.

For example, if two users stake the same amount, but one unstakes early, they lose locked rewards. The user who stays (HODLer) gains these lost rewards. So, the HODLer ends up with a much larger total reward once the TVL goals are met, benefiting significantly from the commitment to long-term staking.

Auto compounding in the Auto HODL Pool offers significant benefits. It automatically reinvests earned rewards back into the staking pool. This process increases the overall stake amount, leading to higher rewards over time. The compounding effect occurs several times a day, enabling a faster accumulation of BLUES tokens compared to non-compounding strategies, which is particularly advantageous for long-term stakers.

Manual Pool

The Manual pool allows separate reward accumulation with manual harvesting, incurring a transaction fee. This pool is better for short-term holders, as it doesn’t penalize early withdrawal. Manual Pools do not have auto compounding benefits compared to the Auto HODL Pool.

The main benefit of the Manual Pool is that you have the flexibility of being able to claim your rewards at any time for trading or other trading strategies on the DEX.

Yield Pool Strategies

Both pool options have their pros and cons depending on the type of user and strategy you may have as a participant int he Blueshift ecosystem. If you can’t decide on which strategy is best for you, you can always split your BLUES holdings across both options allocating a portion of your BLUES tokens to the Auto HODL pool and a portion to the Manual Pool.

If you would like to learn more about yield pools on Blueshift, visit our online documentation which goes into further detail about our yield pools.