Liquidity mining is the core of any defi projects, because those projects are typically not listed in any CEX and users must go to DEX liquidity pool to buy and sell. Therefore liquidity mining of new tokens must have a high APY to attract traders to provide liquidity, usually ranging from 1% daily to 6% daily. Without compounding, 1% daily equals to 365% profit over a year, ignoring the possibility that the LP token may decline in value (discussed separately below). With compounding, 1% daily would yield 101%^365-1 = 3,678%. At 6% compounded hourly or more frequently, we can see an APY exceeding hundreds of billions. Transaction fee is the major obstacle of compounding. Because Defi projects run on public blockchains, compounding requires the user to interact with the contract to put the earned interest into the LP token, and therefore triggers a transaction cost.