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Harvest OR Compound :: Whats the Big Difference?

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gungunkrishu
@gungunkrishu
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2 min read

Hey All;

I'm new to the DeFi world and frankly speaking I wasn't aware of the difference between Compound Vs Harvest. I know what compound interest is and how it multiplies your wealth. But a real example of how it works in the DeFi world is an amazing experience; when you see it yourself in real-time.

I was doing it all wrong for many days until I actually came to know the difference between Compound & Harvest. In order to understand both these termonologies, one should have the answer to both these questions listed.

  • Question1. When to Compound?

You are not in need of Funds i.e. in our example $CUB and ready to invest it further for a period of time say 1 or two months. So if you are one who wishes to invest for a longer period of time then Compounding your $CUB harvest is a good option for You.

  • Question2. When to Harvest?

On the other side, there could be people; who have already invested what they wanted to. And now are looking to exchange/swap $CUB every time when it's available for harvest. If you are a person in this category then harvesting the $CUB is the way to go.

Let's take my example now; as to what I do with my $CUBs earned. In the given image above; I have close to 5.354 $CUBs that I can either Compound or Harvest. Currently; my target is to get to a point that I have close to 3.5K+ staked. Currently; I've close to 3.3K CUBs staked and short another 200 $CUBs token. Hence; I would be compounding the $CUBs earned.

But sometimes; I do harvest the $CUBs earned when I want to swap it with other tokens like bLEO so as to enhance my stake in the bLEO token.

Therefore it drills down to; what's one objective to use the $CUBs earning.

Reinvesting then Compound

Swapping/Exchanging or Booking profits Harvest

All this time; I was doing it wrong. I wanted to reinvest i.e. enhance my stake but what I was doing was harvesting $CUB and then staking it. This way I was paying the transaction fees twice. Therefore it becomes imperative to know the difference between compound & harvest and how it works. If you are a newbie like me; I'm sure you also would be doing it wrong. Please see as I echo my words; if you want to Reinvest $CUBs then you should be Compounding and this way you just pay transaction fees once. And if you want to swap/exchange or book profits you should be harvesting the $CUBs earned.

Hoping for $CUB to be $10+ SooN...

Best Regards

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PS:- None of the above is a FINANCIAL Advice. Please DYOR; Do your own research. I have an interest in the leofinance, cubdefi and associated projects and it's tokens & hence bought some LEO/$CUB tokens; that's iT.

PS:: Image Credits:: leofinance;

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