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description: Getting Started
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# FAQ/Getting Started

### **1.“Generally speaking, what is the easiest flow to follow for compounding rewards?”**

The following is NOT FINANCIAL ADVICE. It is for education and entertainment purposes only.&#x20;

There are countless strategies, and which one you choose depends on your risk tolerance and short, medium and long-term goals. That being said, the "plug-and-play" method is detailed below. Also, take some profits along the way. Don't get too greedy.

_**If $KITTY is OVER the peg:**_

Buy $KITTY and pair it with $MATIC to provide liquidity, and stake your $KITTY-$MATIC LP in the farm to earn $CAT rewards.

_There are two ways you can do this:_ &#x20;

1. Use auto-compound. You can either use our native auto-compounder from the top menu, or use the YieldWolf auto-compound feature to increase your liquidity pool position. From time to time, take a portion out as profit!
2. Manually claim rewards form the $KITTY-$MATIC LP pool and stake your $CAT in the Nursery to earn $KITTY. Once you claim $KITTY, you can sell 60% $KITTY for $MATIC, and compound the remaining 40% of $KITTY with $MATIC back into $KITTY-$MATIC LP. Keep 20% of your sales in $MATIC as profit.

_**If $KITTY is UNDER the peg:**_

1. If you are using auto-compound, withdraw your $KITTY-$MATIC LP and break it to have $KITTY and $MATIC back in your wallet. Use the $MATIC you get from breaking the LP to buy more $KITTY, then put the $KITTY in the single stake $KITTY pool for $CAT rewards.
2. For those who are doing things manually, first withdraw the LP tokens and break them. Then, buy more $KITTY with the $MATIC you got from breaking the LPs. Stake $KITTY in the single stake $KITTY pool to earn $CAT. Now, you have a big fat bag of $KITTY, and you've also helped bring $KITTY back above peg so that the Nursery can resume printing.
3. Once we go back peg, claim and withdraw $KITTY from the single stake pool, sell your $CAT rewards for $MATIC and pair the $MATIC with $KITTY. Now, provide liquidity back into $KITTY-$MATIC LP and stake for $CAT rewards. If you still have more $KITTY, stake them back in single stake pool. Repeat this process until you have used up all you $KITTY.&#x20;

### 2. "What is 60/40?"

60/40 is the method best suited to provide stability for both the platform and for your underlying investment. By boosting liquidity, the 60/40 strategy reduces price volatility, and helps $KITTY stay above the peg for longer to keep the Nursery printing. This, in turn, attracts new investors and keeps the ecosystem growing. The process is as follows:

1. &#x20;When you claim your $KITTY rewards in the Nursery, sell 60% of them for $MATIC.
2. When you go to provide $KITTY-$MATIC LP,  stake the entirety of your remaining $KITTY with the $MATIC you've just purchased.&#x20;
3. Keep your 20% of your $KITTY sales as your dry power to buy $KITTY when it goes under peg, or keep it as your profit-taking.

### **4. "APR is much higher in the Nursery than in the farm for $KITTY-$MATIC LP. Why would I not just invest everything there?"**

The farm APR is linear and prints 24/7, regardless of $KITTY's relation to the peg. Nursery, on the other hand, prints only when $KITTY’s TWAP is above 1.01. Therefore, it may not always be that an investor gets a higher return from the Nursery than from the $KITTY-$MATIC pool.

Because $KITTY follows the price of $MATIC, the $KITTY-$MATIC LP is akin to holding $MATIC in your wallet, except with the bonus of a high farming APR on top of it. In other words, if you're bullish on $MATIC’s price action, the $KITTY-$MATIC LP is a way of holding exposure to that single asset while also reaping high APRs.



## <mark style="color:blue;">**Terms and Mechanisms**</mark>

### **1. "What is an expansionary epoch?"**

An expansionary epoch is the amount of $KITTY that is printed by $CAT in order to increase the total circulating supply.

To simplify the explanation with a hypothetical example, let’s say an epoch is 3 days long and there are $100 dollars in the circulating supply.

&#x20;If the money printer grows the supply by 10% of the existing circulating supply each day, at the end of the 3 days you'd have $100 \* 1.1 \* 1.1 \* 1.1 = $133.

&#x20;Then, let’s say the emissions decrease to 5% per day.

&#x20;You’d then have have $133 \* 1.05 \* 1.05 \* 1.05 = $153 at the end of this second epoch.

### **2. “What is compounding in the context of Kitty Finance?”**

Earning a return on gains you've already made from previous periods is what is commonly referred to as "compounding".

&#x20;For example, consider a 3% daily APR on an initial investment of $100.

&#x20;After 24 hours it would grow to $103.

&#x20;After 365 days without compounding: $1195.

&#x20;After 365 days, compounding once daily: $4,848,272.

## <mark style="color:green;">**Core Values**</mark>

### **1. “I'm invested in the project for the long term, and I feel guilty taking profits. Am I still a team player if I move profits somewhere outside of the project?”**

Never put all your funds in one basket, even if it's $KITTY. Always take gains along the way. The Kitty Finance team views it as a success if, over time, everyone gets their initial investment back into their wallets and continues investing with the profits that come after that.
