Compound Engine

Deposit Pools & The Growth Engine

Core Function

The Deposit Pools are the core vaults and growth engines of the 3 ecosystem. They allow users and the protocol itself to deposit yield-generating assets, earn rewards, and unlike rigid traditional systems, strategically control whether those rewards are reinvested for growth or diversified across the ecosystem. This design reflects a human-centric philosophy, providing the financial flexibility to adapt to changing needs without costly and complex manual intervention.

The Pools: CDPs vs. LDPs

Two specialised pool types work in concert to create a dynamic and tiered growth strategy:

• Compound Deposit Pools (CDPs): The primary engines for asset growth and diversification.

  Growth & Children: Deposits in a CDP earn a "Parent" balance. The rewards generated can be directed to any CDP, where they are tracked as a "Child" balance, enabling automatic diversification.

  Governance Path: Successful CDPs can, through community governance, have their underlying asset added to the protocol's treasury, becoming a target for the protocol's own value-acquisition strategies.

• Liquid Deposit Pools (LDPs): Specialised pools designed as perpetual boosters.

  Targeted Yield: LDPs cannot receive rewards from other pools and cannot self-compound. Their sole function is to distribute their rewards to designated CDPs, providing a constant yield stream to other parts of the ecosystem.

  Upgrade Path: Proven LDPs can, through governance, be upgraded to full CDPs, integrating them deeper into the ecosystem's growth engine.

The Core Mechanism: 3Receipts

When you deposit an asset into any pool, you receive a 3Receipt; a token that represents your claim on the underlying deposit and its accrued rewards. 3Receipts are the fundamental unit of the system, enabling the advanced functionality of Signals and 3NFTs.

The Default Behaviour: Growth & Diversification

By default, a CDP is in a "self-compound" mode. The key here is that your original deposit (your Parent Balance), remains a fixed, immutable anchor. All rewards are automatically reinvested to grow your dynamic Child Balances, visually separating your principal from your system-generated earnings.

However, the system's power lies in its programmability.

Using the Signals mechanism, you can redirect rewards from one CDP to another, automatically building diversified "Child" balances across different assets. This happens without you needing to manually harvest, swap, and redeposit, making sophisticated portfolio management accessible to everyone.

The Big Picture: A Flexible Financial Primitive

This system is not just for individual users. The 3 protocol uses these same Deposit Pools to manage its own treasury. Assets acquired by the protocol are deposited to generate yield, and the protocol itself uses Signals and 3NFTs to strategically manage its balance between long-term growth and immediate revenue generation.

The Deposit Pools are the foundation upon which a more adaptable, personalised, and efficient financial system is built.

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