Good question about autocompounders. I did mention Yearn Finance and their previous strategy for wFTM where they would stake the wFTM on 0xDAO, farm the 0xDAO governance token which they sell for more wFTM and while this lasted, they were able to put out an APY of about 50%. This is essentially an autocompounding strategy.
When it comes to autocompounders for other riskier plays such as using Reaper to autocompound BEETS/FTM from Beethoven X or LQDR/FTM from Liquid Driver, you're still exposed to the same tokenomic risk on whether the inflationary farm token (that makes up part of your LP) will be able to hold value over time. Also, what you're essentially doing here is selling half of your farm tokens which also puts sell pressure on it. Now imagine everyone else farming also selling half their stack every second.
There are instances where this is a good strategy like what you mentioned:
When you're farming something like FTM/USDC and you autocompound your BOO/SPIRIT/BEETS/LQDR tokens into more LP, you do increase your LP position with minimal downside risk. You still don't ever get rid of the FTM vs USDC Impermanent Loss but if you are okay with holding either FTM or USDC and don't mind missing out on FTM price rising significantly/you want to reduce possible downside risk of FTM dumping significantly, then yes, for sure I think autocompounding in this instance is a pretty sensible play.
But again, while your APR on this pair may say something good like 120% today on Liquid Driver for example, this only holds true if LQDR maintains value (it could do the opposite and actually increase too). What you're doing here is taking value away from holders of these tokens each time you compound. I'd say this is fair play on your part, it's a zero-sum game after all.
Whether you should hold the farmed token for pumps or autocompound it for more LP immediately depends on the project's tokenomics. For instance I like LQDR because more than 50% of all LQDR is locked up with an average lock time of over 600 days.
Another thing I have yet to figure out is the buyback schedules for some of these farmed tokens, take BEETS for instance, it may make sense to wait till buybacks (which apparently occur weekly rather than automatically) before conversion to more LP.
