Make it rain with your drip.
Disclaimer: I am not a financial advisor. The content for this article is purely for educational/research purposes only and is merely based on my personal opinions.
Please note: There will be affiliate links in this article. But it will only benefit both of us. If you do not wish to take part under my affiliate links, please feel free to Google them separately. Cheers!
Quick Summary
Drip Network is a Defi project created by Forex_shark and Team that lives on the Binance Smart Chain Network (BSC). It provides a fixed 1% daily return, up to 365% APR. This is not an auto-compounder project, instead, the user has the freedom to compound/hydrate at any time they wish. However, the drip network will charge 5% tax for compound/hydrate and 10% tax for reward claim to Metamask wallet. So please keep in mind before executing any action.
Click here if you are interested to know why I joined Drip Network.
How to hydrate
Step 1) Make sure you have some drip Available. I have 0.1 Drip at this point of writing.
Step 2) Locate and click on the “Hydrate” button.
Step 3) Pay the gas fee and you are done!
Compounding breakdown
Every investor has their own strategy to reap the most out of their money. You can either compound daily, every other day or weekly. However, the most important thing to take note of is the GAS Fees.
The above is the screenshot for my compounding my 0.1 drips. These are the gas fees (transaction fees) you gotta pay for any transaction that you do. Therefore, just make sure that your reward can cover the gas fees and leave you with profit. Apart from the gas fees, you will be taxed 5% for compounding, for example, my reward of $14.07 will be split among my drip deposit and protocol pool, where 95% back into my drip deposit and the remaining 5% will go into the protocol pool.
How often should you hydrate your drip to maximise the returns?
Let’s do some calculations to justify how often should we compound. Let's assume starting with $1000 worth of drip, provided that the price of drip remains the same. And we will run 3 scenarios for a year, daily, every other day and weekly.
Scenario 1) Compound Daily
- Initial balance = $1000
- Before Tax, 1% = $10
- After Tax 1% = 95% * $10 = $9.50
- Average gas fees = $1
- Total deposited at end of year = $31,536.10 — $365 = $31,171.10
Scenario 2) Compound Every Other Day (2 days)
- Initial balance = $1000
- Before Tax, 1% = $20 ($10 x 2 days)
- After Tax 1% = 95% * $20 = $19
- Average gas fees = $1
- Total deposited at end of year = $30,739.83 — $182 = $30,557.83
Scenario 3) Compound Weekly (7 days)
- Initial balance = $1000
- Before Tax, 1% = $70 ($10 x 7 days)
- After Tax 1% = 95% * $70 = $66.50
- Average gas fees = $1
- Total deposited at end of year = $21,551.79 — $48 = $21,503.79
Unless you don’t mind spending hundreds of dollars on gas fees, the ideal situation would be to compound your returns daily, this will maximise your returns in the long run. However, if you are like me, who does not really want to spend so much on gas fees, I would rather compound every other day. As you can see from my calculation, the difference between daily and every other days isn’t much, only cost you about $1000.
Endnote
The frequency of compounding depends on the individual investors. Unless you are a whale or deposit $10,000 or more, I would strongly encourage you to claim today and compound the next day. Earn back the initial investment first before compounding every day.
If you are planning to join Drip Network, please join my referral below, I would really appreciate the help and let’s make money together.
How to join?
Step 1) Use the referral link ( Either mine or someone else)
- Drip required a Buddy in order to start investing. But you have the freedom to choose who to be your buddy.
- My referral link: drip.community/faucet?buddy=0x678EDFA56dc0D299f6ED58F0f095b14D2587aE86
- Or you can copy and paste my buddy address in the “Get a buddy” section.
- Buddy Address: 0x678EDFA56dc0D299f6ED58F0f095b14D2587aE86
Step 2) Buy at least 1 Drip from “Swap”
- This project is in the Binance Smart Chain network(BSC), so get some BNB in your Metamask BSC network and swap for at least 1 drip. Drip is roughly worth around $150 USD at the time of this writing. So you need at least $160 USD to cover for Drip token + gas fees + all the necessary approval.
Step 3) Stake (deposit) your drip into the faucet.
- After buying some drip tokens, head to the faucet and deposit your drip token.
Last Step) Think about the compounding strategy.
Never spend your money before you have earned it .— Thomas Jefferson
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