Listen up, Cadets. Class is in session.
It’s time to focus because in this week’s edition of Moon Academy we’ve got some pretty tough topics for you to wrap your head around, including why there’s no autocompounding in Ziggy’s Pot, and how often you should be manually compounding your POTS.
We’ll try not to get too technical, but these are the big questions Cadets have been telling us they’re struggling with on the Moonpot syllabus. So let’s get to it.
Pay attention at the back!
1 / Why don’t the bonus POTS that I’m earning as interest in Ziggy’s Pot autocompound?
Let’s start with some context for any new Cadets.
Ziggy’s Pot is where you stake Moonpot’s POTS token to earn interest on your deposited assets — currently more than 120% APY at the time of writing.
As an aside, by being part of Ziggy’s Pot you are also put into Ziggy’s monthly prize draw where lucky Cadets can win crypto prizes once every four weeks. The next prize draw will take place in five days (Sep 1) when 10 Cadets will share Ziggy’s prize pool (current value: $892k).
But regardless of if you win the prize or not, every single Cadet who puts POTS in Ziggy’s Pot earns interest.
The money for this comes from what we’re calling ‘Revenue Buybacks’, which is to say 5% of all the revenue across the entire Moonpot platform is used to buy POTS off the open market, and pay users staking in Ziggy’s Pot.
POTS was only minted in the first week of August and we’ve already made $161,000 worth of buybacks.
Check your share of these earnings by clicking on the burger menu in the top right corner of the Moonpot dApp homepage, selecting ‘My Pots’, and then opening the section labelled ‘Earnings’ on your Ziggy’s Pot info box.
You can withdraw your earned POTS to your wallet at any time by clicking the button labelled ‘Withdraw Earned POTS’, or you can compound your bonus POTS — which is to say collect them and add them to your deposited POTS in one go — by clicking the ‘Compound POTS’ button.
The Compound POTS button reinvests your earnings so that your stake becomes bigger and you earn even more from interest payments moving forward.
Note that you will have to pay a gas fee in BNB whatever action you take (withdraw or compound) due to the cost involved of using Binance Smart Chain. This BNB payment goes to Binance Chain validators — not to Moonpot.
But what about autocompounding?
Well, that’s where a system reinvests your interest earnings for you automatically. All of which leads us to this week’s hot question: will Ziggy’s Pot be updated so that bonus POTS earned as interest are autocompounded?
Sadly, the short answer to this is NO — Ziggy’s Pot does not and will not allow for autocompounding.
Sorry, team. We know many of you are screaming out for this. And we would of course totally do it if we could. But the reason for this is it’s just not possible based on how the smart contract that powers Ziggy’s Pot needs to be structured to work properly.
The more dedicated Cadets out there will have noticed, however, that the CAKE you earn as interest from our Cake Pot autocompounds, and that the standard BANANA you earn as interest from our Banana Pot also autocompounds. Captain Ziggy of course anticipates you wondering why those assets can be autocompounded, but POTS cannot.
We don’t want to turn this into a long lecture about coding and smart contracts, but the important thing to remember is that Moonpot is powered by Beefy Finance, and that most of our Moonpots are built on top of Beefy’s pre-existing savings vaults. That is where the autocompounding interest on your assets is earned.
As you probably know by now, Beefy is a yield optimizer with specifically designed autocompounding vaults — each of which requires its own complex smart contract. And so the Cake and/or Banana you deposit with Moonpot is being autocompounded in the Beefy vault before returning to you via Moonpot as earned interest.
Ziggy’s Pot, however, is special. Very special.
This particular Moonpot exists to reward project-committed Cadets who stake POTS in our governance pot — commonly known as Ziggy’s Pot. Anyone who does this earns a share of Moonpot’s revenue. Because 5% of all the interest earned across the whole of Moonpot is sent to Ziggy’s Pot and paid out to the Cadets staking POTS.
So what needs to be understood here is that all our Moonpots are built on top of pre-existing autocompounding Beefy vaults EXCEPT for Ziggy’s Pot, which solely exists within the Moonpot ecosystem as a governance pot paying out platform earnings to users who stake — and, of course, to collect crypto from all the existing Moonpots to build up Ziggy’s big prize draw (current value: $892k) each month.
For those mechanisms to work there is no way to write a smart contract that can do those things AND execute autocompounding. Nor is it possible for Beefy to build an autocompounding POTS Vault due to the way Ziggy’s rewards and prizes need to function and be maintained.
If any Cadets want to do a deeper technical dive on this they are more than welcome to join our ‘development’ channel on Discord and discuss this directly with Moonpot’s development team.
OK, so there’s no autocompounding for Ziggy’s Pot — as discussed above — but compounding the bonus POTS earned on your staked POTS is easy.
See here for our step-by-step guide.
So how often should you do this? Well, it really depends on how many POTS you have earned.
If you have only earned $1 worth of POTS but the gas fee costs $1.50 then of course it makes no sense to go ahead with the transaction as you will be losing money.
Compounding regularly will boost your APR to an even higher APY. Yay. But of course compounding too often will lose you money due to the repeated cost of gas fees. Boo.
Thanks to one of our brightest Cadets there is now a tool you can use to work out how often you should be compounding to earn the highest return possible.
Simply go to potscalc.com to find out how often you should be compounding.
This website will tell you how often you should compound your POTS to have the highest net outcome possible — based on a calculation of how much you would earn versus the fees you would pay should you regularly compound at different set time periods.
Follow our handy guide if you need help using it.
3 / There is a compound POTS button for Ziggy’s Pot, but I’m also earning bonus POTS for staking CAKE in the Cake Pot. Why can I only withdraw the POTS from the Cake Pot and not compound them into Ziggy’s Pot?
Good question.
So, as any experienced Cadet knows, if you stake CAKE in our Cake Moonpot your CAKE autocompounds, but you also receive bonus POTS as boosted APY.
At the moment you only have the option to claim your bonus POTS.
Simply find your Cake Pot under ‘My Pots’, click the section that says ‘Bonus Earnings’ to see how many POTS you have earned, and then hit ‘Withdraw Earned POTS’ to claim them to your connected wallet — you will have to pay a small BNB gas fee to confirm the transaction.
Cadets who want to stake those POTS in Ziggy’s Pot to earn interest on them then have to manually navigate to Ziggy’s Pot and make the deposit themselves.
Well, good news Cadets. Mission Control reports that in the future there will be a button within your Cake Pot that will do all that for you: claim the bonus POTS and then deposit them straight into Ziggy’s Pot.
The team is working on improvements and new features all the time so we can’t say exactly when this will be rolled out, but it is definitely being worked on. Watch this space.
For more answers to common questions about Moonpot please check our docs at: https://docs.moonpot.com/