Yield aggregator comparison
Yearn vs Beefy vs manual. Who keeps more of your yield?
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Yield aggregators (Yearn, Beefy, Convex, Curve gauges) automate the boring parts of DeFi farming — claim rewards, swap to base asset, restake, repeat. They take 2-20% performance fees in exchange. For small positions, DIY compounding costs more in gas than you'd pay in fees. For large positions, DIY can beat aggregators. This tool shows where the crossover is.
Enter your principal, pool APR, aggregator fee, and gas cost per manual compound. The output shows net annual yield for each approach at different compounding frequencies.
Compounding frequency has a larger mathematical impact than most DeFi users realize. A pool earning 25% APR compounded once per year yields exactly 25%. The same pool compounded daily yields 28.4% APY — a 3.4 percentage-point improvement with no additional risk. Aggregators that harvest and compound every few hours capture most of this benefit automatically. The manual compounder who only claims monthly loses that gap.
The aggregator market has matured significantly since 2020. Yearn launched in July 2020 and catalyzed the category. As of 2025, Beefy Finance operates across 20+ chains with over $250M TVL. Convex Finance controls enough veCRV to influence which Curve pools receive gauge rewards, making it a de facto infrastructure layer for Curve-based strategies. Newer aggregators on Base and Arbitrum (like Reaper Finance and Beefy's L2 deployments) operate at gas costs under $0.10 per harvest, making frequent compounding viable at any position size.
$10,000 in a 25% APR curve pool: Yearn vs Beefy vs manual
Yearn v3 (20% performance fee on gains, auto-compounds daily): net ~22% effective.
Beefy (4.5% perf fee, auto-compounds daily): net ~25.8% effective.
Manual claim+restake monthly on mainnet ($15 gas × 12 = $180/yr): net ~22.2% effective.
Manual on Arbitrum ($1 gas × 12 = $12/yr): net ~25.8% effective.
Beefy and Arbitrum-native manual are roughly tied; Yearn loses to both on smaller positions.
What each aggregator is good at
Yearn: battle-tested (5+ years), strong Curve integration, strategies use advanced leverage/compounding. Higher fees (20% of gains). Best for complex multi-protocol strategies. Beefy: multi-chain (BSC, Polygon, Arbitrum, Optimism, Base), lower fees (~4.5%), simpler strategies. Best for basic auto-compound of existing pools. Convex: boosts Curve LPs via locked-veCRV rewards. Niche but powerful for Curve-heavy portfolios. Autocompounders on L2s (Reaper, StakeDAO): lower TVL but cheap fees.
How to evaluate an aggregator strategy before depositing
Start with the strategy contract on Etherscan or Arbiscan. Every Yearn and Beefy strategy is an on-chain smart contract with public code. Look for: (1) what protocol does it interact with — the aggregator risk stacks on top of the underlying protocol risk; (2) does it use leverage — some Yearn strategies borrow against deposited assets to amplify yield, adding liquidation risk; (3) how frequently does it harvest — check past transactions to see if it actually runs as advertised.
Check the TVL trajectory. Aggregator strategies with rapidly declining TVL often indicate the yield has dropped below what pays for gas, the strategy is being deprecated, or there is a known issue. TVL growing suggests the strategy is competitive and attracting capital. DeFi Llama shows historical TVL for Yearn and Beefy strategies down to the individual vault level.
Look at the audit history. Yearn's codebase has been audited by Trail of Bits, MixBytes, and others. Beefy has had multiple audits. Newer, smaller aggregators often have one audit or none. An unaudited aggregator strategy on top of an unaudited base protocol stacks two layers of unreviewed code risk. No audit eliminates risk entirely but the absence of one multiplies it.
Convex Finance: how veCRV boosting works
Curve's tokenomics give locked veCRV holders up to 2.5x boost on CRV rewards when providing liquidity. The problem: you need to lock CRV for up to 4 years to get full boost, and the boost applies only to your own liquidity. Convex solves this by pooling veCRV across all depositors. You deposit into a Convex-wrapped Curve pool, and Convex applies its massive veCRV balance to boost your rewards as if you had locked CRV yourself.
Convex controls approximately 45-50% of all veCRV as of 2024-2025. This makes it the largest single participant in Curve governance. Protocols wanting to direct CRV emissions to their pools effectively must campaign on Convex and Votium — the 'bribe market' where protocols pay CVX holders to vote for their gauge. This created a multi-layer incentive system: CRV rewards attract CVX holders who control veCRV who vote for gauge weights that determine CRV reward rates.
For a Curve LP, using Convex typically adds 0.5-2% APY above going direct to Curve, plus the ability to earn CVX and CRV that can themselves be staked for more yield. The tradeoff: three layers of smart-contract risk (your LP tokens, Curve, Convex). For large stablecoin positions ($100K+) in major pools (3pool, FRAX/USDC), Convex has earned its place as the standard approach. For smaller positions or newer pools, the complexity vs. benefit calculation changes.
Tax implications of auto-compounding
The IRS has not issued definitive guidance on whether auto-compounding events in a DeFi vault constitute taxable income events. The practical risk: if each harvest is considered a disposal of the reward token (to re-invest), every auto-compound is a micro-taxable transaction. Yearn may harvest your $10,000 position 365 times per year, generating 365 potential taxable events at $0.80 each. That is $292 in micro-transactions to track and report.
Most tax-software tools (Koinly, Cointracker, Taxbit) can pull vault events from chain data and aggregate them. Connect your wallet address and export for your jurisdiction's reporting. The good news: Beefy and Yearn use vault tokens (yvUSDC, mooUSDC) — your position grows in vault token value rather than through discrete reward claims. Some accountants argue this means no taxable event until you withdraw, similar to how S&P 500 ETF capital gains are not taxable until you sell. Consult a crypto-specialist accountant before assuming this treatment applies to you.
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Yield aggregators — frequently asked questions
Are yield aggregators safe?
They add a layer of smart-contract risk on top of the underlying pool. Yearn has been exploited twice (Feb 2021 $11M, Jun 2022 $245K). Beefy and Convex have had bugs but not major exploits. Rule of thumb: aggregators are safer than the underlying pools (they manage positions professionally) but never safer than cold-stored spot positions. Don't put more in any one aggregator than you can afford to lose.
What's a 'performance fee' vs a 'management fee'?
Performance fee: charged on the gains you earn (e.g., 10% of realized profit). Management fee: charged on AUM regardless of performance (e.g., 2% of principal per year). Yearn uses primarily performance fees. Traditional funds often combine both (2-and-20 hedge fund structure). Aggregators with management fees rarely compete with performance-fee peers.
Can auto-compounding underperform manual?
Rarely, but yes: if the aggregator's harvesting strategy happens at bad times (right before price drops, high gas) or the swap routes aren't optimal. Most aggregators are better than amateurs at timing and routing. Manual compounding only wins when you have a very large position (gas becomes negligible relative to principal) or when you have special strategy insights the aggregator lacks.
Do aggregators compound gas fees too?
They pass gas costs through to the strategy — so your effective yield is net of gas. For a strategy running 10 compound cycles per month with $2 gas each, $20/month in gas is deducted from your yield before the performance fee. The good aggregators batch harvests across all depositors to amortize gas costs; your share is tiny.
Is Yearn's 20% fee too high?
It's toward the high end of DeFi fees but in line with traditional hedge funds. For simple auto-compound of a Curve pool, Beefy's 4.5% is plenty. For Yearn's advanced strategies (leveraged stable farming, multi-protocol position management), 20% can be justified vs DIY complexity. It depends on what you're using them for.
What is the 'optimal compound frequency' for a DeFi position?
Mathematically: compound when gas cost equals approximately 1/365 of your annual yield (daily compounding threshold). On mainnet at $15 gas, you need annual yield > $5,475 to justify daily compounding — that's $109,500 principal at 5% APY. On Arbitrum at $0.10 gas, daily compounding is worth it above $730 principal. For most retail positions on L2, weekly compounding is optimal; on mainnet, monthly.
Can I use Yearn or Beefy in a tax-advantaged structure?
Not directly — DeFi protocols don't integrate with IRAs or 401(k)s. However, some self-directed IRA custodians (iTrustCapital, Alto IRA) allow crypto holdings. Those custodians generally support spot crypto, not DeFi protocols, due to custody requirements. If you are optimizing for tax efficiency in DeFi, the main tools are jurisdictional (Portugal, UAE, El Salvador offer 0% crypto capital gains) rather than structural.
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