No More Fake Yield Farming
In my last post, I referred to myself as a DeFi “middleman” — an investor stuck firmly between the very rich and the very poor.
In the oceanic animal terms of modern investing, I am not a whale, dolphin, shrimp or plankton. I am a sea bunny.
Since my humble beginnings in DeFi (March 2021), I have always been chasing yields. Like many who entered in the height of FOMO, I felt I had missed the train on all of the “blue-chip cryptos”. In my lil monkey mind, BTC, BNB, and ETH had already “peaked”, so I needed to “catch up” with smaller marketcap tokens and their promises of 100% APY (an absurd number to me at the time).
I immediately fell in love with yield farming. As an avid (addicted?) gatcha gamer and clicking fanatic, I couldn’t stop myself. In this new yield farming world, I was still leveling up but with “real” money!
Here was my game-breaking strategy:
So, first, I take the CAKE and I stack the CAKE. The next day, I collect the free CAKE and I stack more CAKE. This will get me even more free CAKE for the next day! Dyamn. OK, and then I keep doing this and a year from now I will have 2x+ the amount of CAKE. Then I can continue to stack that CAKE and it will give me even more CAKE. Just think of how much CAKE I will have by that point! I will be rich with CAKE. But wait, what if I add more money to my CAKE total right now? That would speed everything up, right? Then instead of waiting a few extra months for that free CAKE, I can just get the CAKE now and stack more CAKE. In one month, I will be rich with CAKE and I can tell my friends about it.
This. Strategy. Is. Foooolprooof!
Let’s highlight a few of my many mistakes:
#1 -> I didn’t question where the CAKE was coming from. I assumed it was from “trading fees” (lul).
#2 -> I didn’t know what “max supply” or “infinite mint” was. Plus, why would that matter if I was getting paid in “trading fees” anyhow?…oof.
#3 -> I didn’t understand what “taking profits” meant — I was getting paid in profits every day, right? Why can’t I just stack the CAKE until I’m getting “$1000 a day” (my arbitrary goal line).
#4 -> I didn’t doubt that rich investors and large holders of the CAKE token were on my side. “People aren’t going to constantly sell a token that they hold, right? That would lower the value of their own tokens!”
#5 -> I didn’t ignore the LFGers on Reddit calling for “$100 CAKE!” It rose to $40 once while I was holding it…I refused to sell because I thought “oh but that guy on Reddit was pretty sure it would be $100 by the end of the year.”
Fast forward to Fall 2021.
I had learned some things. I was ready this time. The Bull Market was coming back (see: dead cat bounce). This time I was going to take profits and invest only in innovative ideas.
My train of thought:
Hmm, so what is this Olympus DAO thing? DeFi 2.0, eh? Hmm…Oh, look at these OHM forks. Dyam. 300,000% APY? Hold on — lemme check my napkin — yes! That’s actually higher than 100% APY! OK, CAKE and all of these other shit tokens are boring and stupid — this is the future! So, OK, let’s see. Olympus DAO’s token is $1,300 and, wow, this other fork called TIME is $3,000! Hmm, so if I put in $10k, I’ll be making — carry the one, divide by 2, plus 365— wait, $200 a day?! WTH?! That’s amaaaazzzing! And what am I making with this $10k over here? $10 a day? What a waste! Let’s put that money to work! Wait…slow down…you’ve learned your lesson. Let’s do some research before throwing your money around. To Coingecko! Oh what’s this? Klima DAO’s price has dropped down to $1200? And it’s helping the environment?! I’m all in!
nOw ThiS sTraTegY iS DEFINITELY FOOLPROOF!
Reversing the Tide
I might not win, but I at least need to reverse the losing.
From now on, in order to control my internal APY Addict, any yield farming or small marketcap investment I make needs to answer these four questions:
What is the dev team’s commitment to DeFi and Discord?
If they have mercenary mods and no dev presence, I’m out.
Where are the protocol’s emissions and yields coming from?
If the token is being “provided as an incentive”, I’m out.
Who are the top holders (and how did they become the top holders)?
If it’s a bunch of anonymous wallets that bought large chunks in the beginning, I’m out.
Does it have a “lambo” calculator that will show how my $100 will be $500k a year from now?
If so, I’m out (except for you Titano — LFG!). 🤨
So have I finally found my foolproof Sea Bunny strategy?!
Come join us in NomDAO Discord and let’s discuss!