Elephant Money Is Back From The Dead!
Elephant Money was exploited for $11.2M BUSD less than one month ago.
The ELEPHANT token price is down more than 80%, the TRUNK stablecoin depegged, and the project was declared dead by many outside observers.
Many people lost money panic selling, and we have yet to see the protocol completely recover. However, the exploit forced developer Bankteller to make security and architecture improvements. It is better that this exploit happened last month, rather than six months or one year from now.
Fortunately, a glimmer of hope emerges. Elephant Money has been relaunched, effective today!
In this article, we will review the current state of the Elephant Money ecosystem.
ELEPHANT token is the value-accrual token powering the ecosystem. Let’s take a look at the price action before and after the hack:
For the last few weeks, selling pressure has evaporated. Trading volume has decreased to near zero.
The Stampede and TRUNK staking contracts have been paused, so it makes sense that volume would die down.
Nobody is buying, and nobody is selling.
Key Point: If you think the Elephant Ecosystem can recover, this ELEPHANT price range is a strong buy. We may not see this price range again once the wheels start turning. (not financial advice, don’t sue me bro!)
You can read more about the ELEPHANT buy/sell tax and graveyard mechanics in the whitepaper.
TRUNK is a stablecoin that is backed 25% by ELEPHANT and 75% by BUSD. Minting TRUNK adds buy pressure to ELEPHANT — this is why I refer to ELEPHANT as the “value accrual token.”
TRUNK was severely knocked off peg after the hack. Let’s take a look at the price action:
The huge red candle was the day of the hack. The TRUNK peg dipped all the way to $0.6 . Since many stablecoins such as UST, cUSD, and USDN have lost peg and recovered, I decided to make a gamble on TRUNK’s recovery. I bought some more TRUNK at $0.67 and sold at $0.9, resulting in a small profit.
Post-exploit price volatility has died down. The protocol’s Pancakeswap liquidity pool has stabilized around 6 BUSD : 7 TRUNK, which corresponds to a price of about $0.85 BUSD per TRUNK. The price remains in this zone because the protocol has been dormant until today.
Only $1M BUSD needs to be added to the pool to rebalance TRUNK/BUSD to peg. I suspect it may take a few days or weeks due to TRUNK price spikes being sold off by anti-arbitrageurs.
My final observation is that TRUNK staking is live with an astonishing 112% APR / 202% APY reward if compounded weekly.Even TRUNK is off peg, this pool provides insane single-sided yield!
If you currently own TRUNK, it is in your best interest NOT to sell TRUNK before it returns to peg. If you have either completely lost faith in Elephant Money or need cash immediately, you will be selling at a small loss if you convert TRUNK to BUSD at current prices. Only $1M BUSD needs to be added to the TRUNK/BUSD LP for TRUNK to regain peg, which is not a lot of money in the DeFi world.
Key Point: TRUNK is still off peg, trading at approximately $0.85. It is not clear how quickly TRUNK will get back to peg. A 112% staking APR is very attractive even if TRUNK is off peg. (not financial advice, don’t sue me bro!)
Where do you go from here if you want to invest? Well, it really depends on your appetite for risk.
For starters, I would advise you to check out my “series” articles on Stampede Perpetual Bonds to get a complete understanding on how to play the Elephant TRUNK game.
And, you can always just buy some ELEPHANT if you can stomach the risk. Personally, I made a small 2% portfolio bet on the ELEPHANT token.
Part 1: My personal strategy for playing Elephant Money Stampede
Part 2: Simulations of the game mechanics at work in Stampede. No one else has made the types of graphs I provide (as far as I can tell).
Part 3: APR vs. APY for Elephant Money. Also, gas fees.
Part 4: The lowest risk Stampede bonding strategy that I wish I was using. Upcoming, possibly tomorrow on May 4.
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Thanks and have a nice day!
-DripStrategy
