Vault Farming
DeFi Strategies
Vault Farming is a DeFi strategy where users deposit assets into smart contract vaults that automate the harvesting, compounding, and reinvestment of earned rewards. Unlike manual yield farming, vaults streamline reward optimization by reducing gas costs and compounding frequency friction. Vault farming platforms often aggregate APR opportunities across ecosystems, enabling users to earn passive income from liquidity pairs, single-sided tokens, or synthetic derivatives. It’s a foundational method for active yield generation and often serves as a bridge into real-world asset conversions like $KAG or real estate.
Use Case: A user deposits their USDC/FLR LP tokens into a Layer 1 auto-compounding vault that harvests rewards every 4 hours and reinvests them—allowing for exponential yield without manual effort. Once returns taper, they exit into silver-backed tokens like $KAU for long-term wealth storage.
Key Concepts:
- Auto-Compounding — Vaults collect rewards and reinvest them continuously to increase base value.
- Gas Efficiency — Aggregated harvesting reduces transaction costs across many users.
- Reward Maximization — Captures time-sensitive APR spikes during emissions cycles.
- Exit-to-RWA Strategy — After vault returns diminish, profits rotate into assets like $KAG, $KAU, silver, gold, or real estate tokens.
Summary: Vault Farming is a high-efficiency DeFi tool that transforms passive capital into compounding yield. As emissions decline or volatility rises, experienced users rotate gains into yield-bearing real-world asset tokens—preserving value while minimizing exposure to on-chain downturns.