Trying To Simplify The Animal Farm
The Animal Farm has some incredibly complex tokenomics and game theory which I absolutely love. But I also understand that this makes it extremely difficult to get a large number of people on the platform. There is a steep learning curve and I am just over a year into my Defi journey so I am sympathetic to those that are overwhelmed.
The reason people put money into platforms like Celsius is that the experience is relatively easy and is backed by an aggressive marketing campaign. Unfortunately learning about Metamask is not so exciting. This is a shame because platforms like the Animal Farm are much better and can offer higher returns. You also have Pancake Swap (which is a better solution than CeFi) that offers miniscule APYs in comparison to the Animal Farm.
How You Can Participate?
Rather than staking on a platform like Pancake Swap, you can stake blue chip cryptocurrencies and LPs on the Animal Farm to earn $AFD tokens (a.k.a. DOGS). You can perform single staking on $BUSD, $BTCB, $ETH, $WBNB, and $CAKE rather than just letting them sit in your wallet.
Because it is early and we are deep in a bear market, the APYs are relatively high because there is relatively little capital in these pools. The APYs range from 126% in $BUSD to 293% for $CAKE. Now compare that to Pancake Swap where you are getting 11.66% for staking the BTCB/BNB LP (you expect a higher APY for LPs due to impermanent loss). There is just under $29 million in liquidity there too.
So that’s great. The APY is high. But what’s the catch? There are 2 of them.
- The Withdrawal and Deposit Fee
There is a withdrawal fee of 3% and a deposit fee of 3% for single staking your blue chip cryptocurrencies. These fees reduce to 2% for LPs. This means if you put $1000 you will get a stake of $970 and then when you’re finished (assuming no price change) you will get $940.9. This means you will need to make $59.10 or a 6.1% return for it to be worthwhile. You should ensure that you are willing to commit for at least a month.
2. The $AFD Sell Tax
Rather than allowing people to stake their blue chips and then dump the reward token, a loyalty based tax system incentivises people to remain on the farm and stake their $AFD in the Dog Pound. To learn more about the $AFD sell tax go here. You can reduce your tax down to 6% by remaining on the farm and staking your $AFD in the Dog Pound. Your tax will decrease by 1% per day that you are staked in the auto compounding pool.
Why You Should Hold On To Your $AFD
So you might be thinking that if you just wait and reduce your tax, then you can dump your $AFD. However, you can stake your $AFD in the Dog Pound and earn BNB from the sell taxes. There will be more sellers once people reach a more acceptable tax level. I believe the tipping point where selling starts to increase substantially is around 40–50%. I then expect the selling to increase as the tax level gets closer to the 6% mark. This means you will earn $BNB just by staking your $AFD rather than selling it. $AFD has been designed to be held. Just know that not everyone will and that’s where you can benefit the most. The drop in price will see you earn more $BNB and I believe this will attract buyers.
But Wait There’s More
I won’t go into too much detail but you can also use your $AFD to earn the native governance token $AFP. You can then stake your $AFP in the Pig Pen to earn BUSD dividends. Again the idea is to not sell $AFP token. You may notice that a portion of the $AFD sell taxes go to people that have staked in the Pig Pen.
If you want to see more details of an end to end Animal Farm strategy you can read this article.
What If Forex Pauses Again?
I’m confident this won’t happen but let’s say it does happen. There is a way to emergency withdraw your stakes in the pools and farms. I was able to do this for v1. If $AFD were to be paused then this would be annoying because there is no emergency withdrawal for that. Now assuming all of this happened, Forex has already shown that he will get it back online even if it takes a long time. The risk is there but overall I believe it is a risk worth taking assuming you haven’t put everything into the Animal Farm.
Final Thoughts
Remember, all you need to do to get involved is buy blue chip cryptocurrencies. You can consider the $AFD and the $AFP as a bonus. You can patiently learn more about the ecosystem so that you can develop more advanced strategies over time. There are plenty of great YouTubers out there to help guide you. If you’re brand new, I would recommend Brandon from the Drip Guide channel. He is the best person I’ve seen at explaining basic concepts to people.
I write quite a lot on the Animal Farm and other projects because I enjoy doing it so please do look at some other articles I have written. Also feel free to read the opinions of others. Even those who aren’t bullish on the Animal Farm. From my perspective, I say why not get those blue chip tokens working for you on the Animal Farm. You will get better APYs and you are working with tokens that have already been through market cycles.
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 Referral Link:
https://defi.animalfarm.app/farms/0xDa805dBC6530c9ed1360b7c61624613c4Fe380a9
Piggy Bank Referral Link:
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 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. 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