TheDripBuzz - November 2nd, 2022
The Big Launch - Finally!
Yesterday, the animal farm v2 (or is it v3? I've lost track...) finally launched, as planned and seemingly without any major issues. The community celebrated, and everyone sighed in relief.
First of all, I want to congratulate Forex Shark and his team on another big milestone. I hope they take at least a day off and sleep in - it would certainly be well-deserved, and probably well-needed also.
However, after a big party, there is a chance of a hangover. I am sure for some the party is still going strong. They are buying and staking their dogs and pigs, looking at their rewards, and pondering their next move. On YouTube, the DRIPfluencers are releasing new videos, explaining their strategy, and cheering with the crowd. Yay!
Elephant in the room?
But there is a big elephant in the room that no one seems to care about. And I find it weird because in most communities there are at least a few critical voices. But I cannot seem to hear any, that is, there are plenty of people calling DRIP a Ponzi or a scam, but few or none that are hopeful but skeptical, positive but moderated, critical but constructive - all at the same time.
Betting hard on DRIP makes me think I am either extremely smart, or extremely stupid! - TheDripBuzz
Before you accuse me of FUD'ing - let me tell you that I have lived for a while, long enough that I have seen a couple of downfalls. I remember losing a big chunk of money in the 2008 crash (Yeah, stocks). I was around when Lycos was hot in the search engine business and pets.com raised $82M in an IPO in Feb 2000 [1]. I have experienced mortgage rates above 10%. Heck, I even re-assembled a Macintosh model II back in the late '80s, before the internet even existed. My point is that you NEVER know what will succeed or fail, go up or down, and there are no investments that are guaranteed. The Macintosh model II was, in my eyes at that time, a piece of crap that did not inspire any desire for investments in Apple. I did however manage to invest in several losing companies later - several of which were "impossible to fail". So please don't tell me there is no risk in a given investment - even DRIP - because I know better.
Back to the elephant in the room. Let's call it "real value", or lack of such. What people tend to forget while in mindless bliss about the AF launch, is asking how much real value it added.
Below is a DRIP price chart for the last week. As you can see, it is falling, falling, falling, then rising just before launch until reaching a weekly high of $4.91 half an hour after launch. Then it started falling again. We're at $4.72 as of the time of writing, and the way it is looking, the arrows are back pointing downwards.
This might not be too surprising, knowing the way that AF works. First of all, to participate you have to create DRIP/BUSD LP tokens, which means people might be tempted to sell their DRIP to participate, causing sell pressure on DRIP. Second, the reward you get for staking DRIP/BUSD is DOGS, which has a selling tax starting at 90%, getting reduced by 1% per day. So most people will probably wait 2-3 months before selling their DOGS, if at all. While being staked, they earn PIGS. These pigs can be staked in the pig pen, which will earn a reward of PIGS and BUSD. Finally, there is an entry/exit fee of 1%/2% in the DRIP/BUSD pool. The DRIP will be sent to the tax pool, while the BUSD will be used to buy back DRIP. This should reduce sell pressure on DRIP, but it might take some time to kick in.
Fresh money = added value?
I have been trying to find out how much money was added during the launch. The AF site gives us a clue[2]:
I remember yesterday the figure said about $48M. If this is correct, it means about fifty million bucks were added during a single day. Pretty impressive!
But here's the thing: Every single one of those dollars is attached to a desire of multiplying. And we all know money cannot multiply by itself, no matter how much of it we're talking about!
So despite the complicated route that the money takes from dollars to DRIP/BUSD to DOGS to PIGS and back again, sooner or later it will return to dollars. And there is no more of that than when the journey started, unless, of course, more investors have joined in the meantime.
This tells me that what we have now are new, complicated ways to compete against each other, and potentially win - or lose - money. This does not excite me much. Some are going to win, but others are for sure going to lose. Or have to wait a long time to break even. This is why I am currently not investing in the AF. I think my chances are much better in the Faucet, where I have managed to build a sizable position, though still far from being a whale.
That said, I am not negative about the AF. It is just not for me - yet. I do think it is important to have a rich ecosystem with several different plays for different tastes. And I might jump in later. But in the end, as of now, the AF doesn't seem to be worth it for me.
What we really need
What would make it worth it, would be if we saw some way of bringing in EXTERNAL capital. Capital that is not competing with the rest to multiply, but instead is payment for a product or a service.
There are rumors of such things[3]:
-Scratchy: lottery tickets with custom branding capabilities
-Dogs roulette/Dogs of fortune: online casino/betting
-Lending/insurance protocol
These are things that would meet my definition of VALUE since they are net positive to the overall result, instead of what we have now which is at best a null-sum play.
I do of course understand that these things will take time - lots of time - to develop. In the meantime, I am going to be extremely patient, hydrate my faucet, and hopefully grow my investment.
Until then - stay calm, and DRIP on!
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