Today we look at getting the maximum out of the 1% daily reward and how often should we claim. I am aware of the more complex strategies, but lets have a look at the simple technics today and cover the more complex strategies a bit later in our series.
So Drip pays out 1% on a daily basis on your deposited tokens in the faucet. So the more you deposit, the higher your reward. Have you read about compounded interest? Or interest on interest? This is exactly the big power of the system. The more often you compound, the higher your reward gets. You deposit every day your reward, your deposit increases and so does your daily reward. Exponentially.
But what happens if you re-compound just every other day, or weekly or even only once a month? How big is the difference in profit?
I did the calculations for exactly that.
The table above shows you the number of coins you will end up with if you re-compund daily, weekly or monthly with an initial investment of 10 Drip tokens. To my surprise the difference is not as big as I expected it to be. Of course you got the most profit out if you re-compound as much as possible. But you got also the fees you pay for each transaction. I ignored those for simplicity here. But as you can see, if you spend only a few minutes a month and re-compound only once every month you end up with only about 8% less coins after a year. With way less effort then pressing the buttons every day.
Conclusion
Daily reward is nice. Daily re-compound means you have to think about it each and every day and go to the faucet and claim. And pay the fees. To make it closer to passive income I think it is enough to re-compound just every other day, not having to think about Drip on really a daily basis. Unless you really enjoy. Then please, go for it.
Lets continue on our Drip journey. Today we will look at the risks involved when joining the Drip network. Shall we?
Rug pull
As your initial investment is locked forever, the devs could just run away with all the funding deposited and enjoy the rest of their life. Given the fact that Drip is already operating for over 12 months successfully, I would rate his risk as very unlikely. Rug pulls usually happen at the very beginning of a project, shortly after the tokens are sold, all the investors are full of hope, the price of the token is shooting up and ….. the team with the money in their pocket runs away. As said, very unlikely at this stage of the project in my humble opinion.
Tax pool liquidity
What happens if the whole system runs out of liquidity? Lets remember the Drip whitepaper: All transactions are taxed with a 10% fee. There is even a whale tax applied. Initial investments are locked. So all new buyers add liquidity, all transactions provide liquidity. But never the less, the system has to provide 1% reward on a daily basis. This sums up exponentially. Even if the price chart shows that some momentum is back in Drip, all the transaction fees need to still take care of all the daily rewards. So in my opinion this is the biggest risk in the systems and with the highest likelihood in my opinion.
As per the white paper there is the option, if the tax pool should ever be in the situation where there are not enough Drip tokens available, that new Drip tokens can be minted. This would be then an inflationary measure, the overall Drip volume will be increased, which would lead as to the following risk.
Token price
Well, I guess this risk exists with all crypto investments. No matter how many tokens you earn over time, if the price goes down to zero, your investment is also worth zero. How likely is that? Lets have a quick look at the current price start since Drip’s launch:
As you can see, Drip’s all time high was around 160 USD. Currently the price is less then 10 USD. The price went even up from 5 to 10 USD recently. How likely is it nowadays that the price goes to 0? Unfortunately I do also not have a crystal ball as well, and a price drop is again possible. Although I think chances of profiting are at this price level way higher then loosing again. Even if the price falls down in the short term, with the compounding feature one should still earn money if the entered the game at such a low price. So price drop short term is likely, but mid to long term I see this also as unlikely.
Is there any other risk out there which is not listed here? I would appreciate to read your feedback. Lets learn together.
Mitigation measures
So what can we do to minimize any potential loss? I guess the general rule for all investments applies here too: Invest only money you can afford to loose. Not more. And in addition, to not always re-compound your rewards, but take some profits from time to time as well. At least that much to get your initial investment back. You can use this to start the next project.
Or in other words: How to claim your first daily reward of 1%. So pretty much 24 hours after my initial deposit, my reward is ready to be claimed. Or, as we like to increase our rewards going forward, we will not claim, we will re-compound the profit to increase our deposit and get a slightly higher reward in the next 24 hours. Ready?
How to compound
The process is pretty easy and straight forward. Let me show you. As a first step go to your Faucet site and connect your wallet if not done yet. The dashboard shows you at the top left corner how many Drips are ready to be claimed. In my case I earned 0.129 tokens on the first day. In USD this is 1.27 USD. Remember my article here, where I stated that my initial investment was about 100 USD? Bingo, roughly 1% of reward. Not bad, huh?
Now lets re-compound our earned tokens by clicking on the “Hydrate (compound)” button on the right hand side of the faucet side. Your wallet will ask you to confirm the transaction, approve that, wait a few second until you see this screen:
Congrats, you compounded your reward. Our deposit increased and the reward will be calculated on the increased amount.
And that is it already. This should be your daily (or every other day) routine as Drip community member. And passive income earner. Lets increase you investment and earnings going forward.
Yes, I joined finally the Drip community and bought my first tokens. Why now?
Introduction
First lets start of with what Drip actually is. As you are reading the article I assume you are either familiar with Drip or you at least heard about it. Either as life changing money maker providing a 1% daily return or as scam and ponzi-scheme where you loose all your money.
So in other words: You either hate or love it. As always there is not only a black and white view, there is much more to it.
Captures value by being scarce, deflationary, censorship resistance and being built on a robust decentralized blockchain
Got its own little exchange under the “swap” tab waiving buy tax
Deposited in the faucet will provide a consistent 1% daily return
Liquidity provider options by providing BNB
10% on all transactions
Referral system to manage your team (eg. like aidrops) and earn from your downline
BR34P token required to earn from your downline
So the heart of the system is the 1% daily return, which can be claimed or hydrated (compounded). This gives huge returns over time due to the compounding effect. That is exactly what I will start reporting about, like I did with HNW Raffinery. But more often. Promised.
Why did I buy now?
Well, looking at the price chart of the token it came down quite a lot. Drips all-time-high was at around 160USD. Today the price is below 10 USD. There seems to be some momentum coming back to the drip token as its price increase from 5 to 10 USD. Also I read about marketing campaigns that are getting started. Hence I thought the time is actually good to buy my initial investment.
How to start earning
So I started by buying some Drip tokens on the Fountain Swap. 10.65 to be precise, remember the 10% tax on all transactions. So around 100USD deposited at current price level. Just for the records.
Get a Buddy: As I read from so many sources about Drip in the meantime I didn’t want to select a single buddy, but ignore all the others who provided valuable content. That would be unfair. So I decided to use the overall dev wallet as buddy to support further development and marketing of the network and community and support everyone with that. (Does anyone know if this has any negative impact one way or the other? I couldn’t find anything related to that).
Then I deposited the 10 tokens in the faucet. Now it is time to wait and claim my reward tomorrow. Or the day after. Depending on the fees I pay… but hey, I am ready to make millions.
As mentioned in one of my other posts a while ago, I will start to explore some high risk DeFi projects going forward. Here is another journey I started only today.
Have you ever heard about Drip? Pretty sure you did: Invest into Drip, buy some tokens, deposit them and you will be rewarded with 1% on a daily basis. You either re-invest this amount or you take profits and claim it. Drip also used a referral system, where you can profit from your ‘team’ which led to quite a lot of Drip articles on Medium and everywhere.
I have to admit, I never used Drip myself. Looking at the current price chart of it, I decided to not choose Drip for my experiment (or better experience), but use one of the new similar and hopefully improved systems instead: HNW refinery. Let me take you on my journey. Keep in mind, I am just learning about this system together with you. Should we get started?
Overview
The team behind HNW is, as per their Whitepaper, a “team of professionals who want to change the crypto space through hard work, ingenuity, and trust.” And this is intended to be achieved by community building the best offers to clients and investors. It is mentioned a several places that the teams mission and number on priority is to keep the investors money safe. That is a good starting point I would say.
HNW is collaborating with many so called alliance partners like Sidekick Finance, Crypto-Logic, Crypto-Hunters, etc. and offers various services in the area of NFT integration, community building, fund raising, anti-bot & other safe launch measures, smart contract consultancy and much more which adds utility to their tokens.
The foundation of the whole platform are 3 tokens:
HFUEL: To keep it short, this is actually the only token you need to start earning with the refinery. You deposit HFUEL tokens, which will allow you to earn rewards from your deposit.
HNW (xHNW): Mainly used for team leaders, or wingmen, as they are called here. Staking of these tokens is required to increase the maximum payout of your wallet. See picture below.
Sidekick (xSK): Staking of xSK can increase your daily reward from 0.8% up to 1.2%. See picture below too.
Tutorial – how to get started
Lets keep this article a bit shorter then intended first, a follow-up is planned, lets have a look at the steps I took to get started. Feel free to use it as tutorial for yourself too.
I bought 100 HFUEL as a starting point and received 95 tokens in my wallet. There is a tax of 5% on any buy, sell, deposit, transfer transactions. I then deposited the 95 tokens in the refinery and ended up with 90 HFUELs. So in other words there is a 10% tax to start with the refinery. Keep that in mind if you like to deposit a certain amount of tokens.
Prerequisite:
Metamask using the Binance Smart Chain
Some BNB (or BUSD) to buy HFUEL tokens and then also some BNB’s to pay the gas fees obviously
On the left side click on HFUEL to open the menu and then click on “Buy”. This directs you to PancakeSwap and you can add directly the HFUEL token to the token list to swap. Just accept adding the token to your list.
Swap your BNB or BUSD for HFUEL tokens.
Head back to the HNW site and click on “Refinery” and then on “Pipeline”.
As a first step here you have to select your “wingman”. This is your team leader in the system. Either do your own research for your preferred wingman or feel free to add my address to support my journey in this area: 0xb3C253D80578f569cFd4fe2E916EDbF01B384577. Make sure to confirm the transaction.
Then it is time to deposit the HFUEL tokens. Either hit “Max” or enter the number of HFUEL tokens you like to deposit. Once the number is added, click on “Approve” and then “Deposit”.
As soon as your deposit is done, you will see your number in the dashboard in the section “Available” starts increasing.
Claim or refuel?
Once you deposited your HFUELs in the refinery you start earning rewards. As mentioned, depending on your stake of xSK between 0.8 and 1.2% daily. You can claim (5% tax) these and sell (15% tax) your tokens if you like.
Probably the better option at the beginning, and this is where the power of compound interest will show its strengths, is to refuel your earnings. So you will end up not only earning on your initially deposited tokens, but in addition also on your reward.
Lets assume you deposited 100 tokens and you earn 1% (for simplicity) you will earn 1 token after a day. If you refuel, you will earn 1% on 101 tokens the next day, which is 1.01 tokens. The next day 1% on 102.1 tokens, and so on. If you do your math, this sums up nicely for you.
And now?
So is this the new Drip? Before jumping to conclusions yet, lets explore the system further, lets see how the deposit growths, lets refuel to gain more. And lets have a follow-up to see if this investments was worth it.
Again my wingman address, if you like to use it: 0xb3C253D80578f569cFd4fe2E916EDbF01B384577
