Wormhole FAQs

This article is written for Timeleap’s product feature, Wormholes. If you’ve yet to read the introductory article for Wormholes, we recommend that you do that first.

This list of FAQs is not exhaustive, and we’ll continue populating it as and when needed.

Alright, without further ado, let’s begin!

1. What happens after I invest a stable coin / large cap into a Wormhole?

Before you invest, make sure to DYOR by clicking on “Details” in the Wormhole card UI, and you will see what you are farming.

For instance, you might be staking USDC and farming WMATIC-USDC on another project. When you stake USDC, our smart contracts split the initial USDC into half, using one half to purchase WMATIC. Our contracts then form the LP on your behalf, and invest into the other project’s WMATIC-USDC farm.

This process is simpler for single stake Wormholes. For instance, if you stake WMATIC to farm WMATIC on another project, our smart contracts simply do so on your behalf, performing the auto-compounding for you so you can enjoy the luxury of having more precious time for other things in life.

2. Why should I stake at Wormholes instead of going directly to the project?

There’s nothing stopping you from doing so if you wish to support the said project.

You could go directly to the project but then you’d have to:

  • Perform rigorous DYOR to assess the safety and security of your stake. For the trained eye, this could simply be a matter of 15–60 minutes per project, including a contract review.
  • Perform your own harvests and compounding, if you should choose to do so.
  • Deal with the emotional stress of native token price action and its related FUD

We think that investing in yield farms should be simplified. As yield farmers, solidity devs, and macroeconomics enthusiasts, we think we can help make life easier for you with Wormholes.

Ultimately, it really depends on your preference and risk appetite. Wormholes are built with a particular target audience in mind, essentially those who just wish to retire with about 2~5% APRD, sipping mojitos on a beach vacation.

3. How are Wormholes different from a Zap feature on Vaults?

For the wrinkle-brained, good on you for figuring this out!

Next step, how do you determine what’s a good project to enter? The main difference here is the added role that the core team plays in adding new Wormholes.

We work tirelessly to perform rigorous DYOR to assess the safety and security of your stake. For the trained eye, this could simply be a matter of 15–60 minutes per project, including a contract review.

It’s the combination of a zapping vault together with our knowledge on the best projects to get the best returns — this is the recipe that will give you more time to deal with life.

If researching on new farms is your kinda thing, then we’d encourage you to speak more in our Telegram so that we can start assessing them for the benefit of the rest of the community!

4. Is it possible for my initial investment in stable coin / large cap to decrease? What are the risks?

All risks are stated within the Wormholes UI.

High risk advisory

For High Risk farms, there is potential IL due to the project’s earlier layers dumping.

If there’s low liquidity for the earlier layers, we recommend staking with small amounts. Note that we have a safeguard in place — our Wormhole contract protects you via a maximum slippage setting of 5%. Should this safeguard trigger, it will cause your deposit transaction to fail. Nifty eh?

Medium risk advisory

For Medium Risk farms, there is still potential IL but it is less of a concern. For instance, let’s take a WMATIC-USDC LP. A chain native like WMATIC is naturally more stable than a farm’s native token. In fact, chain natives typically follow the movements of large caps — when paired with a stable, we can expect the LP token price to be less volatile as compared to single staking of the chain native.

There are also deposit fees (to the specific project, not Timeleap) but you’re likely to earn it back through farming. Please make sure to calculate your returns prior to staking so as to ensure that you’ll still be able to regain your initial fee that you’ve paid upfront.

Low risk advisory

In the case of single staking wormholes, your only risk would be the deposit fees that you’ve paid for (to the specific project, not Timeleap) when entering the stake. Please make sure to calculate your returns prior to staking so as to ensure that you’ll still be able to regain your initial fee that you’ve paid upfront.

5. How do Shares work? Do Shares get converted back to the initial stable coin / large cap that I invested?

Shares represent the proportion of a pool that you own in a Wormhole, and this amount will determine how much in pool rewards are allocated to your stake.

When you stake, you’re purchasing a share of that pool; and when you decide to withdraw / unstake, you’re selling your auto-compounded share of the pool. You’ll then receive the initial token you’ve staked.

6. What’s in it for the farms that are selected for Wormholes?

There are pros and cons to this.

Pros:

  1. When you stake in a Wormhole, the selected farm (not Timeleap) gets to earn deposit fees. Deposit fees serve as revenue for the farm and motivate product development, marketing and continuous operation of the farm.
  2. Through auto-compounding, the selected farm also earns deposit fees with every compound. This is an absolute win-win for yield farmers and farm operators alike.
  3. For a farm that has gone on to multiple layers, staking in a Wormhole that farms an LP of a previous layer’s native means adding liquidity to a previous layer. Since most layered farms suffer from insufficient liquidity for their earlier layers, these holders feel left behind and can be a potential vector for FUD. Hence, added liquidity for earlier layers is actually beneficial to a farm in managing investor sentiment.
  4. More investors staking in Wormholes will result in increased trading volume for the farm’s current native, this helps with major token listings such as CoinGecko as well as AMM partnerships.
  5. Added awareness and exposure for a farm that’s being featured on Timeleap

Cons:

  1. Wormholes are pretty much the same as a certain breed of yield farmers — the one who sells their rewards immediately after harvesting them. This means that the current layer’s native is being sold to fund auto-compounds and deposit fees, thereby creating selling pressure for the native token. But such is the nature of yield farming, and a farm takes deposit fees in return for farmers who may sell their rewards.

We’d like to emphasize that Wormholes were created with partnerships in mind. It’s not meant to destroy partnering farms. On the contrary, it’s meant to help them gain additional revenue through a consistent top-up of deposit fee revenue.

Honest opinions from a farm operator aren’t usually disclosed since most farm operators want yield farmers to feel nice and cosy.

But heck, as farm operators, we would appreciate it if we could get a little more revenue in order to put food on the table and fund future development / marketing efforts.

7. How often is auto-compounding done?

It’s done every 60 minutes, but due to congestion, intervals might be longer.

8. What happens when a Wormhole with the latest farming layer stops minting?

With our vision to become a DeFi private bank, we’re looking to stay up to date with the latest farm launches and provide the best farming opportunities for your funds.

For all farm reviews (done on our Medium), we’ve added the blocktime for when the max supply for the current layer will be reached. And on a weekly basis, we’ll be adding more Wormholes across other projects that will yield a decent return on your capital.

Feel free to unstake and restake into new Wormholes when the latest farming layer stops minting.

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