🟠Concentrated

Targeted position building with rewards from other CDPs.

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Concentrated compounding.

Release 1.

Release 1. Concentrated: Where emissions from one or more CDPs are used to boost the native balance of another CDP.

In the release 1 diagram above, if another CDP or LDP directed emissions to the child of CDP 2, the emissions received by that child would be self-compounded due to the limitations imposed on release 1 children.

To direct emissions from the child of CDP 2 to the child of CDP 1, the CDP 2 child balance will need to be periodically claimed: this moves the native balance from child to parent, which enables the parents signal to be upheld.

For term definitions, see here.

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Objective.

Concentrated compounding strategies involve the use of emissions allocated to the (connected) wallet, but earned by their deposits in other deposit pools. These emissions are routed away from the originating deposit pool(s) and used to further build positions in the signalled CDP.

The more CDPs (or LDPs) signalling the same destination, the greater the potential to which positions can be built. Hence, strategy 2 being a concentrated approach to compounding.

Note. Differentiation between Concentrated and Hyper compound methods references a nuance in: 'Or' vs. 'And' of each type of deposit pool participating in the activity of building a particular position.

Concentrated compounding refers to either CDPs or LDPs participating in building a position. Hyper concentrated compounding refers to CDPs and LDPs participating in building a position.

Release 1 children are only able to self compound. Therefore, moving a balance from Child to Parent enables optionality through the signal command.

Key benefit: The ability to always have a portion of a position in a 'self-compound' state.

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Walkthrough.

A UI guide will be produced and released just prior to release.

To opt-in to this strategy:

• CDPs: review the walkthrough below.

• LDPs: this strategy will be applied by default, however the signalled CDP may not be the one you desire. The walkthrough below will instruct on how to change the signal to point to another CDP.

1. Navigate to the 3.Finance platform,

2. Connect your wallet,

3. Enter the 3.Finance App by selecting to 'Compose Assets',

4. Navigate to the Emissions space within the App,

5. Looking for a CDP, then: The 'CDP' tab is active by default; find the CDP you're interested in and select 'More', OR Looking for a LDP, then: Select the 'LDP' tab, then find the LDP you're interested in and select 'More',

6. An action panel will reveal itself. Set the signal to the CDP of your choice by selecting its icon in the list available and successfully completing a 'Set Signal' transaction on-chain.

The signal is now set to compound into the signalled CDP and will remain so until you change the signal to point towards a different CDP.

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Other strategies.

Familiarise yourself with other strategy ideas, you never know when they may become useful.

Standard compounding.

Hyper compounding.

Looped compounding.

Boosted loops.

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