Current Thoughts On EMP Money
Over the past year, EMP Money has been one of the leaders in Defi space and most notably the Tomb Forks. In a prolonged bear market the overall enthusiasm for crypto and defi is down and this has cascaded to EMP Money. At the time of writing, the peg is a little below 35%. So what is going on? For full transparency, I am a VIP member and have a positive longer term outlook on the protocol but right now it is hard to ignore the market sentiment and feedback I see from other people.
EMP Money have barely put a foot wrong. There have been no significant product delays, high community engagement and they continue to build partnerships and improve their product. They have a strong community and have proven their ability to last. They also have one of the best leaders in the space. So why is the peg level so low and why is it getting worse? Can anything be done about it?
High Risk But Not High Enough Returns?
Make no mistake, this is a high risk protocol just like every defi protocol. Unfortunately for EMP Money right now, I believe they are in a poisonous spot. They are both high risk but “low” return. I say that, but really the returns are still high by regular standard, just low by degen standards. I also think there is limited appetite for complex protocols which EMP Money definitely is. I really believe that the strongest performers over the long term will create a more accessible experience for more novice users.
Detonator Contract Balance Falling
Another problem is that the balance of the Detonator is falling. It is still a healthy balance but is becoming increasingly unhealthy. Thankfully there are plenty of good actors that I believe will ride to 0 just like some would in the DRIP community (albeit on a smaller scale). While EMP Money is more than just the Detonator it is seen by many as the centrepiece so this is a challenge for the team. If the Detonator balance continues to dwindle then the team will need a new focus.
Are Nodes A Problem?
Nodes were introduced by the EMP Money team as an alternative to bonds. The problem with bonds is that your $EMP is locked until peg is restored. This has proven to be unpopular in all Tomb Forks and the fear that peg will never be seen again. Nodes allow investors to see their $EMP again through a daily ROI but I believe this has created another problem. Because of the daily payouts this creates sell pressure on $EMP over time. I believe this is a contributing factor to today’s sell pressure.
Utility Added For $EMP
Utility has been added for the $EMP token but this has still failed to turn the dial. There are partnerships with Growth Defi, Splinterlands, and Up Finance. These will be great in the long run but right now it is not doing enough to reduce the sell pressure. This should serve as a warning to anyone that thinks adding some utility will immediately solve all the problems of a protocol.
What I Am Doing
While I have given critiques and possible reasons for the negative performance of EMP Money lately, I still believe it has a positive future. However, the trend in the market is clear and I see no rush to dive back in. That’s not to say that you shouldn’t, I am simply highlighting what I’m doing right now. I always promise to be honest about my investment journey.
I have adjusted to a 50–50 compound-claim strategy in Detonator and Reactor at the moment. From that I am keeping my $ETH and $BNB as I want to build up my blue-chip stack. The daily returns are relatively low right now so this means that compounding is not as powerful as it once was and I’m not really throwing away huge returns. I am committed to not selling $EMP so am placing the $EMP into the $UPEMP contract on upFinance and staking the $ESHARE in the single asset staking pool.
Final Thoughts
Do I think the team need to “do something”? No. Not at all. We are deep in a bear market and there simply is not a lot of capital or risk appetite. My suggestion to the team would be to bunker down and focus on the final form that AJ has been teasing. I would even slow down on the partnerships and AMAs as I suspect many are taking a break right now. It’s almost like AJ read my mind when I started thinking about this because the weekly AMAs have been reduced to 2 a week.
I would love to hear from people who are either hesitant about EMP Money or completely negative about it. Would love to know your (constructive) reasons.
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
EMP Money Homepage: https://emp.money/#/
Telegram Group: https://t.me/empmoney
Discord: https://discord.gg/9wDDa26Z6e
YouTube: https://youtube.com/playlist?list=PL2ZUX77BqsmWkeOisjYEIeIWs6egmmVBd
An Important Note
Make sure to protect your crypto with a hardware wallet. 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