Compounding on Step

Claiming and Compounding Yield Farm Rewards on the Step Dashboard

One of Step’s highlights and most useful features is the ability to manage DeFi positions by claiming and compounding rewards right from the dashboard. Step’s integrations throughout the Solana ecosystem allow for a variety of transactions to be performed in one place, increasing the efficiency in which users can manage their DeFi portfolios.

To get started with the claiming and compounding features, head to and connect your wallet.

connecting wallet to the Step Dashboard
Connecting wallet to Step Dashboard

In this particular wallet we can see we have a Raydium yield farming position in the RAY/USDC farm.

We can highlight more details of the position by hovering our cursor over the pie chart icons seen below.

Step Dashboard
Step Dashboard with RAY/USDC yield farm position. Pie chart on the right shows Asset Breakdown of position

The APR pie chart shows a breakdown of where the farming yields are coming from. In this farm 7.9% comes from the liquidity pool's trading fees and 20.53% is coming from Raydium's token emission rewards.

Yield Farming APR breakdown
APR breakdown for farming position

Claiming Rewards

To claim rewards that have accrued from a farming position, click the position’s Claim button.

This will prompt a transaction showing the balance increase to your wallet. In this case we are harvesting ~.756 RAY in farming rewards.

Approve the transaction to finalize the claiming process.

Approving Claim Transaction
Transaction for claiming farming rewards

Compounding Rewards

The fast speed sand low transaction costs are a large benefit when yield farming on Solana. The increased cost effectiveness of compounding yields vastly outperforms when compared to other chains such as Ethereum. 

When compounding rewards back into a yield farm position there are four transactions involved.

  1. Claim accrued farming rewards, as done the first section of this guide (above)
  2. Re-balance liquidity by swapping received reward tokens into the liquidity pool token pair
  3. Add token pair to liquidity pool to receive LP tokens
  4. Stake LP tokens into yield farm to generate additional yields via staking rewards

Step automates this procedure, only requiring the user to approve the transactions as each step is performed. This string of transactions would incur significant costs and wait times if done on Ethereum, likely negating any benefits of compounded yields, depending on position size. 

To compound yields of a farming position on the Step Dashboard, click the arrow next to the farm's Claim button and select Compound.

compound rewards button
Compounding rewards button for RAY-USDC yield farm on Raydium

Pressing Compound will open a new pop-up window within the dashboard. From here we can perform the four steps involved in the compounding process.

1) The first step is to claim rewards. Do so by clicking the Claim Rewards button. This will prompt a transaction from your wallet.

claimg rewards to compound
Compounding rewards pop-up window. Claim Rewards button shown

Approve the transaction in your wallet to move onto the next step.

approving claim transaction
Wallet transaction for claiming farming rewards

2) The second step is re-balancing the claimed reward tokens by swapping into equal amounts of the liquidity pair. In this case, our rewarded tokens are RAY and the yield farm is a RAY/USDC pair. So the re-balancing will entail swapping half of our RAY token rewards into USDC so we can add back equal amounts of each token to the liquidity pool. 

Click Swap to prompt the transaction.

re-balancing liquidity pool
Automated token swap of claimed reward tokens into required token pair amounts

Approve the second transaction to move on to the next step.

approving wallet transaction
Swap transaction showing details of balance changes in wallet

3) The next automated step takes our RAY and USDC tokens and adds them back into the liquidity pool. In turn, we will receive RAY-USDC LP tokens which can be staked in the next step.

Click Add Liquidity to prompt the transaction.

Adding to RAY-USDC Liquidity Pool
Adding RAY and USDC tokens to the RAY-USDC liquidity pool to receive RAY-USDC LP tokens

Approve the transaction in your wallet to move on to the next step.

Adding to RAY-USDC Liquidity Pool
Transaction for adding RAY and USDC tokens to liquidity pool, receiving RAY-USDC LP tokens

4) We now have our RAY-USDC LP tokens, which represent a share of the liquidity pool that allows users to swap their RAY tokens for USDC and vice-versa.

These LP tokens earn revenue from trading fees just by holding them, but if we stake the LP tokens in the corresponding Raydium yield farm we can increase our yields by receiving additional tokens through Raydium’s 36 month emission schedule. 

Press Re-Stake to Compound to prompt the final transaction and stake our LP tokens.

Staking RAY-USDC LP Tokens
Re-staking RAY-USDC LP tokens

Approve the transaction to finish the compounding rewards procedure.

Transaction to stake RAY-USDC LP tokens
Transaction for staking RAY-USDC LP tokens

The compounding process is now complete and we can close the pop-up window.

Finishing Compounding Yield
Finished compounding procedure.

Depending on a user’s farming plan, they might choose to only claim their rewards through Step, or sell the token rewards immediately for USDC. However, some users will want to use Step’s compound feature and roll their rewards back into the yield farm and grow their farming portfolio through the power that is compounding interest.

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