How You Can Invest In The Animal Farm To Earn DOGS Tokens
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.
In my previous article, I discussed the basic strategy to participate in the Animal Farm. This involved staking in the BUSD pool and then going through the process of accumulating DOGS and PIGS. In this article we will examine alternative ways you can invest in the Animal Farm to earn DOGS tokens. You can follow the same process as outlined in my previous article to grow your portfolio but change your initial investment approach. This will allow you to increase your returns while accepting more risk.
Staking your favourite blue chip cryptocurrencies in the Animal Farm pools is a great way to accumulate DOGS without buying them. I will briefly discuss your options and things consider for each options. This is by no means an exhaustive consideration of all factors.
- Replace BUSD with a Stable Coin LP Pair.
You can increase the risk slightly by replacing the BUSD staking with a stable-coin pairing such as BUSD/USDT or BUSD/USDC. The APR will be higher than the BUSD pool and the Animal Farm only uses high quality stable coins so the risk of de-peg (like in the case of UST) is reduced. The risk with this strategy is that you are taking that black swan event risk of a de-peg across two stable coins rather than one (if one of the coins goes to 0 the LP will also fall to 0 regardless of what the other one does).
The APR is likely to be lower than other LP farms because the amount of participation will be higher. Fees are 2% for deposits and 2% for withdrawals. Expect this to be an extremely popular safe haven play for whales that will look to accumulate DOGS in a simple, low risk manner.
2. Stake Your Favourite Blue Chip Cryptocurrencies
Investing in the Animal Farm does not mean that you have to forego investment in your favourite blue chip cryptocurrencies. The Animal Farm has pools where you can stake your BTC, ETH, WBNB, or CAKE to earn DOGS. The returns will probably be a bit higher than the BUSD pool but this will depend on their popularity. The more popular these pools are, the lower the APR.
Instead of HODLing these coins in your wallet, why not stake them on the Animal Farm for a small fee to earn DOGS tokens? The fees in the pools are 3% for deposits and 3% for withdrawals. Overall, this is a small price to pay for being able to have your cake and eat it too (pun originally not intended).
3. Farm LP Pairs To Receive Higher DOGS Rewards
You can create LP pairs in a range of popular cryptocurrencies pairs. This includes ETH/BTCB, BTCB/WBNB, BTCB/BUSD. There are also some more slightly more exotic pairings such as BELT/WBNB that may attract higher APRs that could be an interesting play. You can explore the farms here.
The deposit fee is 2% and the withdrawal is 2%. This option is likely to earn the most DOGS depending on the farm chosen. A good option is to consider less popular farms to earn a higher APR. It might be a good idea to wait a few days before investing in these farms to see which farms offer the best returns. Farms that are of of personal interest to me are DOT/WBNB and LINK/WBNB because I am long term bullish on the 3 coins and they are likely to have higher APRs. Just to be sure to choose your farm carefully rather than spreading yourself too thin. I believe you should stick with your favourite farms rather than continually chasing high APRs (I have other interests outside crypto).
The greatest risk in LP farming is impermanent loss. This needs to be weighed up before investing in a farm. The benefit of LP farming is that they generally offer higher APRs and allow you to earn more DOGS.
While impermanent loss is generally seen as a negative it can also be a positive if you want a way to take profit in the coin that outperforms without having to trade. If one coin outperforms another, the LP token needs to maintain a 50–50 balance so will have less of the coin that outperforms and more of the coin that under performs.
The major downside of LP tokens, is that if one of the coins you invest in collapses it will magnify your impermanent loss and you will also lose a significant chunk of the coin that outperformed. This is also known as providing exit liquidity. The risk of this type of event will be low at launch because only blue chip coins are available for farming.
Final Thoughts
Accumulating more DOGS early is a good long term approach because it will increase your ability to accumulate PIGS over time. It is also a good strategy because you don’t have to sell your favourite blue chip cryptocurrencies. This can also help you keep a diversified portfolio.
A person that spends all their capital buying PIGS will be stuck with a fixed number of PIGS and will need to use the BUSD dividends from the Pig Pen in order to grow their portfolio. Compare this to a person that deposits the same amount into the BTC pool. They can hold on to their BTC and keep earning DOGS which continues to earn PIGS. The same person has many more options with the BUSD they earn in the Pig Pen.
Investing LP into the farms is a great options for accumulating DOGS faster. There are additional risks to doing this but a well selected LP pair could be a great move to grow your portfolio.
LINKS
Drip Community Wiki: https://dripcommunity.wiki/
Animal Farm Links
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