Neo Compounder allows users to wrap NEO and bNEO into a cNEO token, which automatically uses GAS rewards to purchase more bNEO. The project team’s goal for cNEO is to compound GAS rewards into more of the underlying bNEO token over time. The auto-compounding wrapper went live on March 14.
Neo Compounder was designed and built by Lyrebird founder and FUSD contract developer William Song. He said,
NeoCompounder is designed to be able to operate in perpetuity even if the contract owner wallet is forever lost for whatever reason. Furthermore, because the contract is fully open-source, anyone can deploy a new version, withdraw their funds from the contract, and continue operations there.
NeoCompounder is intentionally designed to have a very narrow set of features that are implemented cleanly and elegantly. There are currently no plans to extend its feature set except to increase ease of use or protocol profitability.
To mint cNEO, users can visit the Neo Compounder website and deposit NEO/bNEO for an equivalent value of cNEO tokens. When exiting a cNEO position, there is a fee of 0.5% cNEO.
cNEO will have an initial max supply of 1 million. This limit is in place as an effort to prevent malicious attacks on the contract code. The cap is adjustable, and will be revisited if cNEO’s supply reaches its upper limits.
The GAS compounding frequency is currently set for 48 hours, at which time GAS will be swapped for bNEO. Over time, this frequency can be tweaked to ensure that the amount of GAS swapped every epoch isn’t too large. According to the GitHub repository, “This is to ensure that it will not be profitable for an attacker to move the bNEO-GAS pool in anticipation of the compound call on the next block.”
Should the need ever arise, there is an ability for the Neo Compounder team to convert bNEO reserves into NEO and vote for specific Neo Council representatives if the cNEO supply grows large enough for this to become a viable option. The team included this function if there comes a time when it becomes more GAS-efficient to vote directly for a more competitive yield without needing to update the cNEO contract.
Neo Compounder is the result of two successful GrantShares proposals submitted by Song. The first proposal sought funds to cover smart contract and frontend development costs, which yielded a contract and an MVP web app. The second proposal sought funds to pay for the contract auditing by Red4Sec, which can be found here.
At the time of press, there is an outstanding supply of 5,276.4 cNEO, backed by 5,288.3 bNEO.
To use Neo Compounder, visit the link below: