Tired of pushing buttons?
Place your yield earning on autopilot
Welcome to the auto compounding guide and for all the OGs that knew about Certainty, well this will be a nice upgrade for you all.
This is for the investor who has tried to manually compound already or someone who is simply not interested in taking up more personal time, energy, and have to pay the gas fees to manually compound themselves.
Auto compounders are best for investors who have a mid to long time preference and want to see their investment LP grow without more additional “work.” #basecaseandchill
Table of Contents (Use Control C to copy then Control F to skip to the section you want)
- Save this website
- So what is a Vault?
- Getting Started
- Approve & Deposit
- Zap Function
- What are mootokens?
- Wait… I didn’t get any mooTokens in my wallet
- Should my mooTokens increase in value?
- How do I redeem mooTokens for the initially deposited tokens?
- What are the advantages of the mooToken system?
- What risks do the vaults have?
- Knight Raid Compounders
- Have questions or think there is a bug?
Save the website
BSC
https://knightcompounder.com/#/bsc
FTM
https://knightcompounder.com/#/fantom
If you want to watch a video version of this
So what is a Vault?
Vaults are investment instruments that employ a specific set of strategies for yield farming. They make use of automation to continually invest and reinvest deposited funds, which help to achieve high levels of compounded interest.
By using a Knight vault to compound your investment, you can potentially save thousands on transactions with their associated gas costs and of course something that can’t be measured in $$ your own personal time/energy.
Instead of manually harvesting and selling rewards, buying more tokens, and reinvesting that continuously, a vault does all that automatically for you. In a Knight vault, you earn more of the asset you stake in it, regardless if this is a liquidity pool (LP) token or a single asset.
For example, vaults where one can stake KNIGHT-BNB LP will result in more KNIGHT-BNB LP over time, effectively growing your share in the vault and thus allowing for more and more rewards over time. Or placing BANANA into the vault will also grow your position over time as well.
Even though we use the name “Vault,” your funds are never locked for any duration in any vault on Knight. One can always withdraw from a vault at any moment in time. Knight also does not own user funds staked in vaults.
It is generally best to view vaults as investment tools to store funds for the medium to long term in order to have the effects of compounding really kick in.
When browsing the vaults on the platform, you will see the annual percentage yield (APY), which takes the frequent compounding into consideration compared to annual percentage rate (APR) which does not.
If you hover your mouse over the “i” you will see the “Vault APR”
If you are getting values that are blurred out, you may need to clear cache and refresh the page for the number values to actually show.
You can also see daily interest percentages (Green Box)
Total amount invested in a vault by all users (TVL) is the last value you can see (Pink Box)
Furthermore, one can see what underlying platform the vault is using as a source of revenue. (Pink Line)
After depositing tokens to a vault, the user is supplied with vault specific “mooTokens” which represent their share in the vault. I will elaborate more on “mooTokens” a bit later
Ultimately what all this means is that if you’ve done the whole button clicking thing and realized that simply isn’t for you, the vaults will allow users to sit back and relax as they watch their LP investment grow!
Compounding will occur 2x a day once every 12 hours. Vaults will have a 4.5% performance fee which will be taken on the yield profits upon compounding, never your principal amount. The APY shown on the vaults will already include the performance fee.
If you feel that this fee is unreasonable for you, we encourage you to continue to push buttons and do everything manually. Highlighting what was said in the beginning.
Some of the fee which is again taken from your yield profits will be used to cover the gas fees necessary to perform the auto-compounds and the rest will be used to support the Knight Ecosystem.
There will be a dedicated dev team assigned to these vaults for bug fixes and troubleshooting to keep things running as smooth as possible.
Getting Started
First things first is you’ll want to connect your wallet and make sure you are on the right network.
Green Arrow — Press to connect your wallet
Pink Box — You can choose between BSC and the FTM network for your auto compounding needs
Yellow Line — You can visit any of our partner websites by clicking the respective link
You can also swap between the modes for display by pressing on the sun or moon
If you see this that means you are not connected to the right network
Approve & Deposit
After finding the specific vault you wish to deposit into you will need to “Approve” the transaction.
Take note that certain vaults will have “Withdrawal Fees” so be sure you want to take this action before depositing. They will be clearly denoted where the yellow line is on each vault.
After you press “Approve” you’ll have to press “Confirm” to allow the contract to utilize your LP in order to compound for you.
Deposit
After paying the gas fee for the transaction, the screen will now change where you can either “Deposit” or “Deposit All”
Pink Line — By using the slider (you can move the amount of your LP you wish to deposit) either 0–100% then you will press the “Deposit” button (pink arrow)
Yellow Arrow — If you wish to deposit all your LP in one transaction pressing “Deposit All” will be faster and more cost efficient
Deposit Successful
After you have paid the gas fee to deposit your balance will now update
After you deposit your LP you will be provided with a “mooToken” (which you can see from your BSC Scan or FTM Scan). These generally will not be automatically added to your wallet.
Zap Function
This will be a smart contract function created to be a 1 button click that uses your BNB to make the LP you desire and automatically deposits into the autocompounder. The zap function is currently offered on Core farms, more will be added over time.
Smart Contract Steps
- Uses the BNB you allocated to buy asset 1.
- Uses the BNB you allocated to buy asset 2.
- Pairs the assets to make the LP.
- Deposits LP into autocompounder & sends you the mooTokens for receipt.
Note- There is a 1% fee that is taken for gas for the multiple transactions that occur.
You input the amount of BNB you would like to spend to be able to create the LP.
After paying the gas fee your LP will automatically be deposited into the autocompounder.
What are mooTokens?
A “mooToken” is an interest-bearing, tokenized proof of deposit that you will receive at the moment you deposit in a KnightSwap vault. A mooToken is unique per vault, e.g. you get mooKnightSwap BUSD GUARD tokens when depositing GUARD & BUSD into the vault.
One can view mooTokens as the receipt of your vault deposit.
Knight Vault users should take note that these mooTokens are important and should not sell or exchange it, since that would mean that you would lose ownership of your staked vault assets if you did so!
Wait… I didn’t get any mooTokens in my wallet
After you deposit your LP into the vault you will automatically receive mooTokens. They may not show up in your wallet because you have to add the contract address to actually see the tokens from the wallet UI. They will automatically be listed on the blockchain side.
Here is how you can navigate to find these tokens. Click on your BSC Scan
Assuming you just deposited your LP tokens (which would be the easiest time to figure out which transaction)
Clicking BEP-20 tokens will be one way you can easily spot the mooTokens you were just deposited. (Depending on the congestion of the blockchain it may take some time to populate)
You can alternatively just go to the same transaction hash that you just completed. At the bottom you will see the mooTokens you have just created as well.
If you click on the mooToken it will bring you to the contract address which you can then add to your wallet and see the amount of mooTokens you have.
The same process is followed on FTM but through FTM Scan
Should my mooTokens increase in value?
Knight vaults automatically create more of your deposited asset in the form of compound interest. By holding “mooTokens” in your wallet, they are increasing in value against its corresponding vault asset. The number of “mooTokens” in your wallet will remain constant, but the quantity of the vault tokens they can be redeemed for increases. This is also the reason why “mooTokens” do not 1:1 match with the token amount initially deposited.
How do I redeem mooTokens for the initially deposited tokens?
Whenever you want to withdraw the tokens that are staked for you in a Knight vault, you simply initiate a withdrawal transaction to exchange them. The “mooTokens” are then taken from your wallet and burned, and your deposited assets plus yield will be given back to you.
What are the advantages of the mooToken system?
The Knight mooToken system has a few major advantages:
- “mooTokens” allow any user to withdraw their fair share of deposited funds;
- the system allows you to deposit the “mooTokens” receipt to a cold or hardware wallet for ultimate safety;
- your privacy is maintained, as you remain anonymous to Knight. Your funds in the vault are not tied to the wallet address from which you made the deposit, since the “mooTokens” are the only evidence of your share in the vault. Therefore, you could withdraw your share of funds from a different address if you moved your mooTokens to it;
- “mooTokens” have potential tax benefits since they are not in your wallet, they may not be taxable events as they appreciate, until they come back into your wallet. Consult your financial professional as this may be different in different countries, states or regions.
What risks do the vaults have?
Below are some of the general vault risks:
- Assets deposited into the vault have no risk of decreasing in quantity but can decrease in monetary value.
- As with any smart contract, the ultimate risk is that an investor’s funds can end up stolen or unable to be withdrawn. The team does take steps to quantify the security risks of smart contracts and only will interact with ones that meet a specific set of requirements after excessive testing to make sure the underlying platform does not contain so called ‘rug-pull’ functions. As an educated investor however it will be up to you to do your due diligence to decide whether or not you should be investing in a particular vault.
Knight Raid Compounders
If this is what you typically do from a Raid manually:
- Harvest
- Sell to buy KNIGHT
- Place Knight back into Raid
The auto compounders will be great for you as this will not automate the process. The Castle Vaults for raids will do the exact sequencing above.
If you are depositing KNIGHT into the Raids & are looking to accumulate partner tokens because you enjoy their project then this method with the auto compounders would not be the route you would want to take.
These raid compounders will not be a permanent thing as partner raid terms will need to be renegotiated whenever the time frame is over. This may result in either a renewal (with a different raid pool) or an expiration if the partnership is not going to continue.
Have questions or think there is a bug?
Join the Knight Discord where there is a dedicated channel for everything about the Castle Vaults. Be sure to use the “search” function first to see if your problem or question has already been brought up
Discord
DISCLAIMER: These articles are for educational purposes only. Nothing in this article should be construed as financial advice or a recommendation to buy or sell any sort of security or investment. Consult with a professional financial adviser before making any financial decisions. Investing in general and options trading especially is risky and has the potential for one to lose most or all of their initial investment
