Are You Sleeping On The Piggy Bank?
The Piggy Bank is probably the least talked about feature on the Animal Farm. It gets the least amount of enthusiasm and while I can’t speak for everyone, I believe this is because it is an ROI dApp and has never really soared to the heights seen in the Drip Garden. The Pig Pen is the ultimate goal if you in the Animal Farm so it might seem strange to put your $AFP into the Piggy Bank.
If you are new to DeFi I would recommend holding off on the Piggy Bank until you understand the mechanics thoroughly. Also, you need to understand the broader mechanics of the Animal Farm. However, don’t write it off either. I will explain more. You can learn more about the Animal Farm here.
Brief Description
The Piggy Bank is an ROI dApp where you stake the $AFP/$BUSD LP pair. Each stake is unique and can’t be added to or taken away from. This means that if you have mutliple stakes you will build up a ladder of stakes. For each stake, you will determine an amount of time that you wish to lock up your stake. This is a time in which you agree not claim from the Piggy Bank. You can choose anything from no time lock to 5 years. Apart from this, the mechanics are similar to the Drip Garden with a daily ROI of up to 3%. Just be aware that over time you will not make 3% a day.
Like the Drip Garden, if you regularly claim then your daily rewards will go down but there are 2 key differences to the Drip Garden.
- You need to wait at least 24 hours before you can compound your stake. This evens the playing field because similar ROI dApps like the Drip Garden allow whales to hyper-compound and outpace smaller players.
- There is a time lock that you can nominate. The longer you lock your deposit, the greater bonus you will receive. You can see how the multiplier works in the screenshot below.
I would consider Piggy Bank to be a combination of Drip Garden and HEX Staking with $AFP being used instead of $DRIP.
The Case Against The Piggy Bank
There is a trade off to investing in the Piggy Bank because you have locked your LP when you could be using this capital to earn in the Pig Pen. You also expose yourself to impermanent loss and will not benefit as much from any $AFP price appreciation as you would if you were in the Pig Pen.
For this reason I don’t see much value in a short term stake. The only way to truly benefit from the Piggy Bank is to do a long term time lock. Frustratingly you also have to compound regularly even though your claim is locked. If you don’t compound regularly then your daily LP production will fall. Other factors such as how other players behave will influence your daily production rate.
Approach To The Piggy Bank
Before doing anything you should be comfortable with the idea of locking your funds away for a long period of time. If not, then I would stay away. Some are more willing to do a short term stake but I am personally not in favour of it. I set a cap of about 10% of my $AFP on the Piggy Bank. I put in a 1 year time lock back in August and look forward to May 2023 when my daily rewards can start climbing. You could also look to build up staking ladders like you would for $HEX by doing 1 year time locks every quarter.
Final Thoughts
I’m not a master of the Piggy Bank but it is an interesting part of the ecosystem. In many ways the Piggy Bank levels the playing field compared with Drip Garden. As someone valuing liquidity right now and looking to benefit from price appreciation in $AFP, my personal preference is the Pig Pen. Having said that, a small HEX style ladder strategy could be a good play as well.
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.
Links
Animal Farm Home Page: https://defi.animalfarm.app/
Drip Community Wiki: https://dripcommunity.wiki/
Animal Farm Referral Link: https://defi.animalfarm.app/farms/0xDa805dBC6530c9ed1360b7c61624613c4Fe380a9
Piggy Bank Referral Link:
https://defi.animalfarm.app/piggy-bank/0xDa805dBC6530c9ed1360b7c61624613c4Fe380a9
An Important Note
Defi is the wild west and there are scammers out there trying to take your crypto all the time. If you don’t have a hardware wallet then this puts your crypto at an increased risk as desktop wallets are more exposed to hacks. Centralised exchanges don’t provide an adequate solution either. There have been cases where they have been hacked or mismanaged the crypto their customers have handed over. The best way you can protect yourself is by getting a hardware wallet and storing your crypto there. They may be a bit clunky to use but protecting your crypto is more important.
I personally prefer Trezor but the Ledger is more versatile and can be used for more cryptocurrencies. If you don’t have a hardware wallet you can get a Ledger by using my affiliate link here.
Ledger Link: https://shop.ledger.com/?r=d7b7094a37a9
Trezor Link (no affiliate commission): https://trezor.io/compare