After my last experiment, comparing Kogefarm against a single compound per day I got curious about Beefy.Finance. My spreadsheet tells me that the manual compounding should be in front. Is it correct? This time, I told no one about the experiment in advance.
The Experiment begins
For this experiment I staked exactly 0.0000025 BONE-USDC LP on Beefy.Finance autocompounding vault and Polypups Bone Farm for 24h. After that, I withdrew the LP and reward token from the vault and farm. Then I swapped the earned BONE token from the farm into LP and add it to the original staked amount on the farm. After that I compared the outcome.
On the side of the experiment I won’t take note of the staked amount. As the first experiment revealed, the staked amount has no effect on the outcome. Also, I didn’t create any screenshots again. In the end, there is everything I’ve done public visible on polygonscan.com. Just sad I can’t provide an APR/APRD/APY comparison now.
PolyPup Deposit:
Block: 16576228
Time: Jul-06–2021 21:09:48 UTC
TX: https://polygonscan.com/tx/0x97510641490983a07fa2211d7ad238106fe9faf146f4d40efa6e666d2fc24a72
Beefy.Finance Deposit:
Block: 16576227
Time: Jul-06–2021 21:09:46 UTC
TX: https://polygonscan.com/tx/0x20ba3b5a1edb7aa6dc29872c9280e4959e25d90a84e71e89b6b57ea1b3e82d01
24h later
As already mentioned in the beginning, I just make one compound after 24h. Sure it is bit senseless that way, but it’s for research purposes. Before I dive into the numbers, I will share the transaction logs with you. Like in my first experiment, I waited for an auto compound from Beefy.finance.
Beefy.Finance Withdraw:
Block: 16615980
Time: Jul-07–2021 21:17:08 UTC
TX: https://polygonscan.com/tx/0x356919f4f481e89e194c731c4cc466465684765119058cc93305d8a16863ce7f
Total LP Token compounded: 0.000002641819354358
Total LP Token received: 0.000002641819354358 (Strange. Shouldn’t there be a 0.1% withdraw fee?)
PolyPup Withdraw:
Block: 16615982
Time: Jul-07–2021 21:17:08 UTC
TX: https://polygonscan.com/tx/0x8fd70e6714f35a61aa3863d72cec0043cf39eae0cdd55a09b165b3ad3ed7878b
Total LP Token received: 0.0000025 (again no surprise here)
Total BONE Token received: 0.026726572386595563
Swap 50% of the received BONE Token:
Block: 16616014
Time: Jul-07–2021 21:18:20 UTC
TX: https://polygonscan.com/tx/0x85e8203ff55bd24ac386611a99f8095dd20c7515341d6841c8ef0dbe93edd57d
BONE spent: 0.013363286193297781 BONE
USDC received: 2.072943
My first attempt to create the LP was unsuccesfull. I hadn’t enough USDC. This is most likely as I had to round the swapped amount. I swapped some MATIC to fill it up:
Block: 16616035
Time: Jul-07–2021 21:19:02 UTC
TX: https://polygonscan.com/tx/0x15f10ef1c5b296a4b7b73ab3115fa0ad088de17e5ee4aa33b2f70f1c6ecdb123
MATIC spent: 0.01
USDC received: 0.011425
Adding liquidity to BONE-USDC LP:
Block: 16616044
Time: Jul-07–2021 21:19:20 UTC
TX: https://polygonscan.com/tx/0xfb5b8c068582f54ace1987ea48c80c1731c81cb8033477d3a7a7d819516e15cf
BONE-USDC LP Token received: 0.000000148483369116
Total USDC Spent: 2.077456 -> A total of additional 0.004513 USDC was used to create the LP.
Summing up the new LP Token from here plus the orignal staked one gives us a total of 0.000002648483369116 BONE-USCD LP Token after 24h with just one manual compounding.
Doing the math
Like in every article so far, I will provide you a little oversight for the most important numbers.
APRD Calculation:
LP Token invested per Vault/Farm: 0.0000025 => 100%
Beefy.Finance:
LP Token after 24h 8min: 0.000002641819354358
LP Token gain absolute: 0.000000141819354358
LP Token gain APRD: 5.67277417432%
Manual Compounding:
LP Token gain after 24h 2min: 0.000002648483369116
LP Token gain absolute: 0.000000148483369116
LP Token gain APRD: 5.93933476464%
Formula for APRD calculation: <LP Token gain absolute>*100/<LP Token invested per Vault>
A single manual compound per day already outperformed Beefy.Finance by ~0.27%. This is again in line with my spreadsheet. Btw: have you made your copy in the meantime? ;).
Conclusion
Manual compounding once per day provided 0.26656059032% more gains than Beefy.Finances auto compounding vault. Again, I didn’t take the Gas Fee for the Polygon Network itself into account. With them, I’d still go with a 0.25% advantage for manual compounding over Beefy.finance.
TL;DR
Manual compounding once per day gives you around 0.27% better APRD than using Beefy.Finances auto vaults. This gap grows per day due to the compounding effect.
Final Words to this series
What this series teached me is: Do not trust any marketing material you find. Do really your own research, create spreadsheets, do the math. You will find some surprises from time to time, as I was surprised in this matter and couldn’t believe my formuals in the spreadsheet at first sight. Less profit on Beefy, even with auto compounding than manual? Playing around with the numbers in my spreadsheet it became obious that the high reward fee that Beefy.Finance charges are the reason for that.
And when you don’t trust the math, just do a simple experiment as I made here to proof your point.
