What is Auto (AUTO) and How it Works?

Auto (AUTO) is the native token of Autofarm, a yield farming aggregator operating across multiple EVM-compatible blockchains. 

It allows users to maximise their returns through optimised vault strategies and a built-in decentralised exchange (DEX) aggregator called AutoSwap. 

Unlike platforms that require manual compounding, Autofarm automates the process, reducing costs and saving time. With support for multiple chains and low fees, Autofarm aims to make DeFi more efficient for both casual and advanced users.

Understanding Autofarm Vault Strategies

Autofarm’s vaults are at the core of its operations, offering two main approaches: liquidity mining strategies and single asset strategies.

In a liquidity mining strategy, users deposit a liquidity pool (LP) token pair, such as BNB-BUSD. The platform automatically farms the native rewards, like CAKE, and sells a portion of them (48.3% each into Token A and Token B) to create more LP tokens. 

These are then redeposited into the vault to generate compounded interest. A small portion of profits, around 3.4%, is allocated for platform maintenance, development, token burns, treasury funding, and gas consumption. This setup increases the scarcity of $AUTO and rewards stakers.

In a single asset strategy, users deposit one token, such as beltBNB. Native rewards like BELT are earned and a large portion (96.4%) is sold to buy more of the same token, increasing the deposited amount over time. 

The process follows the same profit allocation, with part of the earnings used for $AUTO burns and staker rewards.

Both strategies benefit from automatic compounding, meaning users do not need to manually claim and reinvest rewards. The approach not only saves on transaction costs but also maximises returns through consistent reinvestment at optimal intervals.

Read also: Automatic Trading on GMGN: A Trader's Guide 

Exploring AutoSwap and Its Benefits

AutoSwap is Autofarm’s decentralised exchange (DEX) aggregator, designed to get users the best possible rates for token swaps. Instead of relying on a single DEX, AutoSwap splits trades across multiple platforms to minimise slippage and improve execution prices.

This intelligent routing system analyses liquidity pools across different DEXes to find the most cost-effective swap paths. 

By breaking down large trades into smaller transactions, it reduces the risk of price manipulation and ensures that trades are non-front-runnable and non-arbitrageable.

AutoSwap currently supports chains like BNB Chain, Polygon, Avalanche, and Cronos, with more networks being added over time. There are no extra fees for using AutoSwap, and all swap details, including routing, are displayed transparently in the interface.

For users, this means better prices without having to manually compare rates between exchanges. The integration with vaults also allows liquidity to be moved seamlessly, with features like “zap” enabling users to convert tokens directly into LP tokens for farming.

Read also: What is BotBro? How to Login Bots for Automation

Tokenomics and Governance of AUTO

AUTO is a deflationary token with a maximum supply of 80,000, making it relatively scarce compared to many other DeFi tokens. It launched without a pre-farm or pre-sale, and tokens were minted linearly between December 2020 and October 2021.

The majority of AUTO’s distribution, around 74.5%, went to vault mining programmes. Another 12% was allocated to the team for development, and 13.5% was reserved for future incentives.

Deflationary mechanics are built into the ecosystem, as a portion of vault profits (1.5% to 3%) is used for market buy-backs of AUTO, which are then burned permanently. This process reduces supply over time, potentially supporting token value if demand remains strong.

Holders can also participate in governance through voting. Users who stake AUTO in the single AUTO vault can vote on proposals, such as deciding the allocation between token burns and staking rewards. Votes are proportional to the amount staked, and each wallet gets one vote.

By combining scarcity with governance rights, AUTO provides both utility and influence for its holders. The platform’s low-fee approach further supports its value proposition, as users retain more of their earnings compared to other yield optimisers.

Read also: Quack AI Governance: Revolutionizing DAO Autonomy

Conclusion

Auto (AUTO) powers the Autofarm ecosystem, offering users a streamlined way to earn on their crypto assets through optimised vault strategies and cost-effective token swaps. With its deflationary tokenomics, multi-chain support, and automated compounding, it appeals to both new and experienced DeFi users.

If you want a secure and straightforward way to trade AUTO and other cryptocurrencies, consider using Bitrue, a trusted platform that offers a smooth trading experience for both beginners and professionals.

Read also: Is Bitrue Alpha Worth It? Give it A Try Now

FAQ

What is the main function of Autofarm?

Autofarm is a yield farming aggregator that automates compounding and optimises returns for users across multiple blockchains.

How does the liquidity mining strategy work?

It involves depositing LP tokens, farming rewards, selling part of those rewards to buy more LP tokens, and redepositing them to compound returns.

Is AutoSwap free to use?

Yes, AutoSwap does not charge additional fees beyond the standard network costs for transactions.

What makes AUTO deflationary?

A portion of vault profits is used to buy back AUTO from the market and burn it permanently, reducing total supply over time.

Can I vote on Autofarm governance proposals?

Yes, AUTO holders who stake in the single AUTO vault can vote on governance proposals proportionally to their staked amount.

Investor Caution 

While the crypto hype has been exciting, remember that the crypto space can be volatile. Always conduct your research, assess your risk tolerance, and consider the long-term potential of any investment.

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