My experience with a compounding tool that turned out to be misleading

[JulianCorvin]

Hello all, I spent a good chunk of last weekend going through what was presented as a proper compounding tool for BTC positions. Looked solid on the surface, clean interface, sliders for frequency, starting capital, monthly additions. The kind of thing you want to trust. Except the numbers didn't add up when I cross-checked manually. The issue was buried in the frequency assumption. The tool was calculating daily compounding on a nominal APY, but the platform it was supposedly designed for actually compounds weekly. That gap, over 18 months with a decent starting position, was enough to throw the projected outcome off by something like 8 to 12 percent. Not catastrophic, but not negligible either if you're making allocation decisions based on those projections.
What gets me is that this kind of error is incredibly easy to introduce and almost impossible to spot if you're not already suspicious. Most people who land on a compounding tool are looking for confirmation, not verification. They plug in their numbers, see a satisfying curve going up and to the right, and leave reassured. The tool does its job psychologically even when the math is off.
I've started treating these calculators the way I treat any on-chain claim: verify before you trust. Reproducing the output in a spreadsheet with explicit formulas takes maybe 20 minutes and tells you immediately whether the tool is consistent. If it isn't, walk away.
Curious whether others have run into this, specifically on tools that don't document their underlying formulas anywhere. Is there one you've actually audited, or at least one where the source is public and readable?

[coinlary]

You didn't  mention the tool  .
What should we comment now??
Have you checked this one out https://bitcoindata.science/withdrawal-strategy ? It could probably fit & help further .

[rat03gopoh]

Such projection code is rarely published, for the obvious reason: "What's the point?" The creators don't care whether the calculations are correct or wrong, as such tools are psychologically appealing to profit seekers. I actually have more confidence in the sheet I created myself.

[nc50lc]

You didn't  mention the tool  .
What should we comment now??

He probably just wanted to share his experience without mentioning that tool.
It's actually good that he didn't mention it because this will look like another disguised advertisement thread if he did.

The actual questions are the last two sentences.

Looked solid on the surface, clean interface, sliders for frequency, starting capital, monthly additions. The kind of thing you want to trust. Except the numbers didn't add up when I cross-checked manually. The issue was buried in the frequency assumption. The tool was calculating daily compounding on a nominal APY, but the platform it was supposedly designed for actually compounds weekly.

You said that there's a "slider for frequency", so if it's set correctly, the tool should work as intended?
Or is it for something else? (hard to tell without knowing the tool)

[joniboini]

Curious whether others have run into this, specifically on tools that don't document their underlying formulas anywhere. Is there one you've actually audited, or at least one where the source is public and readable?

Never see one of them myself. I remember trying to replicate a bot calculation for trading position in the past though, but the tool explain the calculation on a documentation so it's not the same. Then again, if I find a compounding tool (or anything in general) that lacks any explanation on how they calculate the numbers, I'll probably look elsewhere instead of trying them. At the very least they should explain how and what this button or ratio do (if there's any).