Introduction to the Animal Farm
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.
The Animal Farm (version 2) is scheduled to launch on 18 October 2022. In the next few articles, I will be discussing the mechanics of Animal Farm and how to invest in it. Before this, it is important to under the Animal Farm ecosystem at a high level. The Animal Farm is built off the basic foundations of Pancake Swap and is on the Binance Smart Chain. Forex Shark is the developer of the platform and has launched many successful projects and tokens including R34P, BR34P, and more recently, DRIP Network.
The Animal Farm allows participants to provide liquidity in exchange for rewards and ownership of the platform. This differs from Pancake Swap where liquidity providers receive the CAKE token as a reward (most of the time). This reward token can then be sold and the price is reliant on the balance of supply and demand (supply is exceeding demand at the time of writing). Pancake Swap have been working on improvements to the incentive mechanisms for holding the CAKE token but the Animal Farm is a game changer.
Why Use The Animal Farm?
Participating in the Animal Farm allows users to become owners. As Forex Shark says himself, most platforms send fees to developers while stakers assume all the price risk. On the Animal Farm, rewards are paid to stakers but they can also become part owners of the farm through incentive mechanisms that encourage participants to hold the native tokens (known PIGS and DOGS).
The Animal Farm is more than just a yield farming platform though. There is also a development pipeline that includes a hacker simulation game (Dogs of Fortune) and an NFT platform that allows holders to win instantly or stake their NFTs to earn passive income (Scratchies).
How Does It Work?
Animal Farm offers a high yield (not yet confirmed but based on what happened in version 1) for providing liquidity in popular cryptocurrency token pairs such as BTCB/BUSD or BTCB/ETH. There are also pools where you can do single asset staking in blue chip cryptocurrencies. Instead of earning CAKE tokens, stakers receive DOGS tokens. There is a deposit fee and withdrawal fee (ranging from 2–3% for deposits and 2–3% for withdrawals).
After earning rewards in DOGS, there are 3 options for investors.
i) Sell the DOGS token.
This is subject to a heavy tax of up to 90% and is reduced to as low as a 6% based on your loyalty to the protocol. Put simply, the longer you stay invested the less tax you pay. This mechanism can be compared with a locking mechanism for staking that penalises (and sometimes prevents) early withdrawals. Two-thirds of the sell tax is paid to stakers in the Dog Pound and one-third is paid to stakers in the Pig Pen.
ii) Stake the DOGS token in the single asset staking pool.
Instead of selling, staking in the single asset staking pool (the Dog Pound) will increase your loyalty score and allow you to reduce the sell tax on the DOGS token. Stakers also receive two-thirds of the DOGS sell tax which is paid in BNB. The BNB can either be claimed directly or placed in the auto-compounder where half the BNB is sold for DOGS to create a DOGS/BNB LP is placed in the farm to earn PIGS.
iii) Pair DOGS with BUSD or BNB and stake the LP in the Core Farms.
Staking in the core farms earns PIGS tokens. The core farms are the DOGS/BUSD LP farm and the DOGS/WBNB LP farm. The PIGS token is the native governance token of the platform. Stakers in the Pig Pen earn the majority of fees received by the platform.
The DOGS token is important because it enables participants to continue earning PIGS which can then be staked in the Pig Pen. By staking your PIGS in the Pig Pen, you will receive a share of most of the fees paid by the platform including deposit fees, withdrawal fees, sell taxes on PIGS and DOGS, and other fees generated by the farm in the future. This will be driven by platform turnover, total value locked, and fees from offerings on the platform such as Dogs of Fortune and Scratchies. The Pig Pen has the potential to be extremely lucrative as the platform grows.
In future articles, we will walk through how to participate in the platform and discuss the tokenomics, game theory, and mechanics of how to invest in the platform. This is the part that I personally enjoy.
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