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 app.step.finance and connect your wallet.
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.
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.
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.
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.
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.
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.
Approve the transaction in your wallet to move onto the next step.
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.
Approve the second transaction to move on to the next step.
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.
Approve the transaction in your wallet to move on to the next step.
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.
Approve the transaction to finish the compounding rewards procedure.
The compounding process is now complete and we can close the pop-up window.
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.