# Directing your yield with Signals. (2/7) *Series 1.* By [3 Finance](https://paragraph.com/@3finance) · 2025-12-27 yield-management, capital-allocation, governance-signals, defi, protocol-design, sovereign-money, decentralised-finance --- In the previous guide, you learned how to deposit assets into a CDP and let them grow on autopilot with the `SELF_COMPOUND` signal. Now, we introduce the power to program your earnings. Welcome to Signals; the system that lets you tell your yield exactly where to go. > _Think of Signals as setting instructions for a faithful assistant._ Instead of always reinvesting in the same pool (`SELF_COMPOUND`), you can command: _"_**_Take the rewards from my deposit in Pool A and use them to boost the growth of Pool B._**_"_ This turns a static deposit into an active component of your broader strategy within 3. **From autopilot to active navigation** --------------------------------------- Recall that your deposit creates two balances: a Parent Balance (your principal) and a Child Balance (your virtual earnings). The Signal you set applies to the Parent Balance. It determines what happens to the yield that flows into your Child Balance. The two core Signals are: * `SELF_COMPOUND` (Default): Rewards stay in the same pool. Your Child Balance grows in the token you deposited. * `BOOST`: Rewards are sent to a _different_ pool of your choice. Your Child Balance grows in the token of the _target_ pool. **How to change your Signal** ----------------------------- Changing your signal is a simple transaction. Here’s how it works within the interface: 1. Select Your CDP: In the interface, select the CDP where you have an active deposit (a Parent Balance). This opens the action panel. 2. Access the Signal Menu: Within the panel, you will see the current active signal for your deposit. To change it, open the dropdown menu. This menu lists all available CDPs, including the one you’re currently viewing. 3. Choose a New Target: Select a different CDP from this list. This action changes your signal to `BOOST` the chosen pool. 4. Confirm the Transaction: Sign the transaction. This updates the rule coded into the smart contract for your specific deposit. What happens next? Nothing changes immediately with your existing Child Balance. However, from the very next time the protocol’s harvest process runs, all _new_ rewards generated by your Parent Balance will flow according to your new command. **Why use Signals? Strategic possibilities** -------------------------------------------- Signals unlock simple yet powerful strategy layers. For example: * **Diversify Your Yield:** You deposit cvxCRV into CDP A. You can set its signal to `BOOST` CDP B, which holds a different asset like sdCRV. Now, your cvxCRV deposit earns you sdCRV, automatically diversifying your holdings. * **Create a Yield Pipeline:** Direct earnings from multiple source pools to `BOOST` a single target pool, concentrating growth on a specific asset you want to accumulate. * **Optimise for Different Goals:** Direct yield to pools whose assets align with different strategies — one for long-term compounding, another for assets you may wish to later convert to cash flow or stable-coins. The combinations are limited only by the available pools. You can explore community-vetted strategies on the [3 Documentation Hub](https://docs.3.finance/protocols/the-grove/psus/signals/signal-strategies). **Key points to remember** -------------------------- * **Signals Control Flow, Not Existing Balances:** Changing your signal affects future reward flow. It does not alter your existing Parent or Child balances. * **One Signal Per Parent Balance:** Each deposit position (Parent Balance) has one active signal at a time. * **Flexibility is Free:** You can change your signal as often as you like (standard network gas fees apply). Your strategy can evolve with your goals. * **It’s All On-Chain:** The signal is a permanent, verifiable instruction on the blockchain until you change it. **Putting it into practice** ---------------------------- With Signals, you move from passive saving to active gardening. You’re not just watching your plant grow; you’re directing the water to nourish other plants in your garden. Your next step is to connect your wallet, look at your deposits, and ask: “**Where do I want my yield to go next?**” In the following guide, we’ll explore how to take these growing balances and convert them into steady cash flow using 3NFTs. > _Next in the 3 Workshop:_ **_Converting Yield to Cashflow with 3NFTs_** * * * ### **PROTOCOL LEGAL & CONCEPTUAL FRAMEWORK** This documentation is governed by the sovereign doctrine of The Prophet-Engineer’s Codex (v5). 1. Nature of Content: This is a technical and doctrinal guide. It is not financial advice. 2. System Description: Protocol 3 is an autonomous software system. GUILD is its sovereign accounting unit. 3Receipts are protocol-native proof-of-position tokens. 3. Disclaimers: All interactions are self-custodial and entail full smart contract and market risk. Tokens are non-sovereign metrics, not securities. Yield is a protocol-generated surplus, not a guaranteed return. 4. Liability: There is no issuing entity. Participants engage directly with immutable code and assume all associated risks. 5. Full Disclaimer: The complete legal and risk framework is detailed in the [Protocol Disclaimer](https://docs.3.finance/disclaimer). By proceeding, you acknowledge this framework and assume all risks described therein. * * * **Explore the Foundations** --------------------------- _This article is part of a series exploring the future enabled by sovereign digital infrastructure. The technical blueprint for these systems is being built now._ * Follow the build: [**Twitter (Protocol)**](https://x.com/3_finance_?s=21&t=AEUmkoZGISA0C50xKIx7MQ) | [**Twitter (Lead)**](https://x.com/gravity_on_eth?s=21&t=AEUmkoZGISA0C50xKIx7MQ) * Engage with the protocol: [**https://beta.3.finance**](https://beta.3.finance) * * * --- *Originally published on [3 Finance](https://paragraph.com/@3finance/directing-your-yield-with-signals-27)*