Concentrated

Targeted position building with rewards from other CDPs.

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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.

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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 signals.

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

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