Auto-compounder

The basics

LP positions in Uniswap V3 earn fees while swaps happen within their selected price ranges. However, these fees do not accumulate inside the pool, but in a separate balance for each position. One consequence of this is that fees are not compounded automatically as liquidity back into the position.

If a liquidity provider wants to compound accrued fees back into their position, they need to collect these fees, possibly swap them to the correct ratio given the position range and current pool tick, and add these possibly swapped amounts back into the position.

The Revert auto-compounder allows LPs to automate the compounding of the accrued fees in exchange for a fixed percentage of the compounded fees. This serves to incentivize a maximum number of compounds at optimal times with regards to gas costs.

Depending on the fee APR and size of your position this can significantly improve your returns.

Auto-compounding functionality is provided by the Revert Compoundor protocol. Positions managed by the Compoundor contract can be auto-compounded by anyone. The autoCompound function takes any uncollected fees for a position, optionally swaps them to a determined ratio given the position range and the current pool price, and adds it as liquidity to the position.

A small fraction of the collected-and-compounded fees are paid to the protocol and to compensate the accounts call the auto-compound function for their gas costs incurred. This performance fee is set to 2%.

Additionally once a position is added to the Compoundor protocol contract, the position owner is able to conveniently execute the autoCompound function at any time, in which case there are no fees charged aside from the regular gas costs of executing the call.

Read the whitepaper for a more in-depth explanation of how the protocol works.

Rebasing tokens support

The protocol is not intended to work with any kind of deflationary, rebasing, fee-on-transfer, or any non-standard erc20 behavior tokens.