An Introductory Low Risk Animal Farm Investment Strategy
In my previous article I touched on the 4 goals of investing in the Animal Farm. In this article, I will introduce a low risk strategy that can help you to understand how to get started on the Animal Farm. The ecosystem is incredibly complex but if you have a birds-eye view of the basic structure you can branch out to more complex things.
Disclaimer: None of what is written in this article constitutes financial advice. Investing in cryptocurrencies, and in particular decentralised finance, is high risk. What I write is not a recommendation to invest in the projects I discuss. I am not aware of your personal circumstances. Only invest what you can afford to lose. Make sure to do your own research rather than relying solely on my content.
To invest in the Animal Farm, there is no requirement to buy DOGS or PIGS upfront. You can stake assets that are already popular (such as BTC, ETH, or BNB) with a low level of risk. The safest way to participate in the Animal Farm is to stake BUSD in the BUSD pool.
By following the simple strategy outlined below, you can create an infinite loop that allows you to accumulate DOGS and PIGS in perpetuity. The end point of the strategy is that you can earn BUSD without having to sell any of your assets.
Outline of the Strategy
- Stake BUSD in the BUSD pool to earn DOGS.
2. Put the DOGS you earn into the Dog Pound auto compounding pool.
3. The DOGS auto compounder earns BNB then sells half of the BNB to create the DOGS/BNB LP token. The DOGS/BNB LP is then automatically staked in the DOGS/BNB farm to earn PIGS tokens.
4. Place the PIGS earned into the Pig Pen.
5. Periodically compound PIGS in the Pig Pen. You will receive a small amount of PIGS tokens that are added automatically added to the Pig Pen and BUSD will be sent to your wallet.
6. Take the BUSD earned in the Pig Pen and repeat step a).
7. Repeat steps b) to e) to create an infinite loop of this strategy. This will allow you to grow your BUSD position in the pool. You may decide to take some or all your BUSD profits.
Considerations
To invest in the BUSD pool there is a 3% deposit fee and a 3% withdrawal fee. This means that if you invest $10,000 you will be investing $9,700. To break even, you will need to make a 3.1% return on your investment. If you withdraw the funds pay a 3% withdrawal fee. If you entered the pool and withdrew immediately, you will receive $9,409. This means you need to make a 6.1% return on your investment to break even.
Another way to look at it is that you have put $591 at risk for an exposure of $9,700. This risk will diminish quickly over time even if DOGS doesn’t perform well (it will take a bit longer if DOGS perform poorly, which I don’t expect).
The final point is that this pool is likely to have one of the lowest APRs on the farm. It is likely to be a popular place for people to store stable coins. I will personally be using this pool as a savings account. If you understand this strategy, you will go a long way toward understanding how to maximise your returns on the Animal Farm.
What Will Happen If You Stick to This Strategy?
Firstly, your DOGS position will continue to increase over time without having to worry about selling the asset. You will have an asset that should increase in price over time. You will also be directly rewarded when other people sell the token.
If you keep accumulating DOGS and place them in the auto compounder you will continually accumulate PIGS which will you to increase your balance in the Pig Pen and your ownership of the farm. Over time, your BUSD dividends will also increase.
Final Thoughts
Having introduced the low-risk strategy, future articles will consider variations to this strategy to boost your returns by taking more risk.
Animal Farm Links
Drip Community Wiki: https://dripcommunity.wiki/
Animal Farm Home Page: https://defi.animalfarm.app/
Drip Garden Referral Link:
https://defi.animalfarm.app/garden/0xDa805dBC6530c9ed1360b7c61624613c4Fe380a9
Piggy Bank Referral Link:
https://defi.animalfarm.app/piggy-bank/0xDa805dBC6530c9ed1360b7c61624613c4Fe380a9
Drip Network Link
You need a buddy address to deposit DRIP into the Faucet. If you would like to deposit DRIP into the Faucet please feel free to do so. There are other bigger players that may be able to promise more airdrops.
Drip Faucet Buddy Link: drip.community/faucet?buddy=0xa7AC3Ea7D8dEC039F459934Cb0d0152a2e2B28f1
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