> For the complete documentation index, see [llms.txt](https://fluxtra-lsd.gitbook.io/fluxtra-lsd-docs/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://fluxtra-lsd.gitbook.io/fluxtra-lsd-docs/core-features/flux-compounder.md).

# Flux Compounder

Fluxtra’s **Auto-Compounding LP Solution** streamlines liquidity provision by automatically reinvesting rewards from decentralized exchanges like Astroport. Users receive **ftOM-LP** tokens, which remain liquid and can be utilized in other Fluxtra products, such as the **Flux Extractor**.

## **How It Works**

### **User Process**

1. Users deposit funds into the **Fluxtra Compounder Farm**, which has a dedicated smart contract and a corresponding **ftOM-LP** token for each incentivized pool.
2. The **Fluxtra Zapper** automatically converts deposits into the appropriate LP token.
3. The LP tokens are then staked to earn rewards, including dual incentives where applicable.

### **Automated Reward Compounding**

1. A controller bot **compounds rewards daily**, automatically claiming and reinvesting them.
2. A **performance fee** is deducted and sent to the protocol's treasury and **ftOM** holders.
3. Remaining rewards are converted into LP tokens and **re-staked**, increasing the value of **ftOM-LP** over time.
4. On a **weekly basis**, collected fees are converted into **ftOM** and distributed to the treasury and **ftOM** holders.

***

#### **Deposit Options**

Users can deposit into the **Fluxtra Compounder** in multiple ways:

* **Zap**: Allows deposits using any supported token, which is automatically converted into the correct LP ratio.
* **Direct Token Deposit**: Users can deposit tokens from the liquidity pool while maintaining the original ratio or opting for single-asset deposits with auto-balancing.
* **LP Token Deposit**: Users who already hold an Astroport LP token can directly stake it in **Fluxtra Compounder**.
* **Staked LP Migration**: If a user has an LP token staked in Astroport, they can withdraw and directly move it to Fluxtra’s system.

***

### **Advantages of Using the Fluxtra Compounder**

* **Auto-Compounding Efficiency**: Rewards are automatically reinvested, increasing the value of **ftOM-LP**.
* **DeFi Utility**: **ftOM-LP** can be used as **collateral for loans**, transferred between wallets, or utilized in the **AMP Extractor**.
* **Tax Optimization**: Since rewards accumulate within the LP pool rather than being distributed directly, it may be **more tax-efficient** in certain jurisdictions.
* **Single-Asset Entry**: Users can deposit any supported token, and **Fluxtra Zapper** will automatically convert it to the necessary LP composition.

***

### **Fee Structure**

Fluxtra’s model ensures fair reward distribution while maintaining accessibility:

**For Fluxtra’s Native LP Staking:**

* **Deposit Fee**: **0%**
* **Performance Fee**:
  * **2.5% to ftOM holders**
  * **2.5% to the Protocol Treasury**
* **Withdrawal Fee**: **0%**

***

#### **Considerations & Risks**

While Fluxtra follows **best security practices**, smart contract vulnerabilities and market risks remain inherent to DeFi. Users should carefully assess risks before participating.

By using the **Fluxtra Compounder**, liquidity providers can maximize their earnings while maintaining flexibility and efficiency within the DeFi ecosystem. 🚀


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