Elephant Money Part 1: +100% APY on stablecoins
I will show you how to supercharge your portfolio with the highest long-term stablecoin yields I have ever seen.
While nothing is guaranteed in crypto, I believe that this project offers unbeatable stablecoin returns that have the makings of a worthwhile investment.
Elephant Money is a DeFi platform running on Binance Smart Chain that is exploding in popularity. The platform utilizes two tokens: TRUNK and ELEPHANT.
The first of which, TRUNK, is a U.S. dollar pegged stablecoin designed by the Elephant Money team. TRUNK is 25% backed by the platform’s flagship token, ELEPHANT, and 75% backed by Binance USD (BUSD).
The mechanics of the ELEPHANT-TRUNK relationship are outside the scope of this article. I encourage readers to read and absorb the fantastic whitepaper authored by the Elephant Money team for more information.
Today I will dive into how you can take advantage of a 205% fixed APR on the TRUNK stablecoin — and I will show you how to do it while keeping risk as low as possible!
The Stampede Perpetual Bond system offers a 205% APR on the TRUNK stablecoin. It is what most interested me on the Elephant Money platform. This article showcases my simulations to determine the safest Stampede investment strategy.
The 3 conditions that decided my strategy are:
- Recover the principal investment as fast as possible.
- Remove the principal investment from risk as fast as possible.
- Have the option to keep money rolling / compounding inside the system after the principal investment has been removed.
Do these conditions line up with your investment strategy as well? If so, keep reading!
Next, we need to look at the Stampede bond mechanics to determine how they will affect my investment strategy.
- When you deposit TRUNK into the Stampede bonding system, TRUNK is converted to a bond claim. The original TRUNK deposit is non-withdrawable.
- The Stampede bonding system allows you to claim and cash out 0.56% interest per day based on the amount of bonds you own inside the system. This daily interest equates to 205% APR.
- You have the option to compound or “roll” the daily interest on top of original bond amount. Over time, this option exponentially increases the amount of bonds from which you can claim the 0.56% daily interest payout. Any compounded or “rolled” TRUNK is non withdrawable, but increases your claiming rights on future TRUNK daily payouts.
Within the above game theory, the only major decisions you can make are to decide which action to take (claim or roll), and how often to take an action (every day, every other day, ?).
Now that we have the goals and the “game rules” in mind, we can look at what a sample investment of $1,000 USD would look like.
I simulated the income you would receive testing a few different strategies:
From these simulations, it is clear that the quickest way to withdraw the principal investment is to simply claim without compounding.
Rolling any amount at all will increase the time it takes to claim the principal amount. This tactic will definitely come into play later, but only after the principal is withdrawn.
The effects of compound interest do not kick in fast enough to warrant a strategy of claiming combined with rolling. Rolling does not help when the first goal is to remove the principal amount.
In the next section, I show that the “claim only” strategy can be optimized even further.
Another tool we can use is the TRUNK staking function. This staking function works the same as a traditional single-asset staking pool on any generic yield farm: you deposit TRUNK, receive an APR rewarded in TRUNK, and both the deposited plus rewarded amounts can be removed at any time without fees.
The current TRUNK staking APR is higher than almost all other DeFi protocols, measuring in at a whopping 65% APR at the time of writing this article.
Staking TRUNK has the potential to boost returns even more than the first round of simulations. Each day, any claimed TRUNK can be deposited into the TRUNK staking contract for an APR boost on top of the 205% APR daily payouts.
Below is a simulation of claiming daily, compared to claiming daily plus depositing claimed TRUNK into the staking contract.
Staking the TRUNK payouts into the staking contract results in a 23 day reduction of recovering your principal investment!
Now the strategy is even clearer: Claim daily for 157 days, and deposit each daily payout into the TRUNK staking contract.
The last round of Stampede simulations deal with claims and rolls done after the principal amount is recovered.
The first 157 days of the simulations below are the optimized “claim only + staking” strategy to recover the principal investment. After day 157, I simulate two sustainable claiming / rolling combinations.
I consider “APY” as comparing how much money is in your pocket on day 0 compared to day 365. At day 0 with Stampede Bonds, your net return is actually -100% since you cannot withdraw your initial deposit. You have to claw your way back up to 0% before you can actually “make” any money.
When you look at the “APY advertisement” of 672% APY, the the non-withdrawable bonded amount is included in that particular calculation. Users should not expect to grow their money by +600% using this protocol for 1 year. Instead, doubling the money-in-your-pocket in 1 year is a realistic expectation from using this protocol!
Based on my simulations and the 3 conditions I outlined at the beginning of the article, here is how I am going to play Elephant Money Stampede Perpetual Bonds:
- Deposit my principal
- Claim TRUNK daily
- Deposit the claimed TRUNK into the TRUNK staking contract
- At day 157 switch to claiming one day then rolling the next
If you share the same mindset as myself and are interested in following this strategy, you will have nothing but claiming to do for 157 days.
For the next article in my Elephant Money series, I will publish a new article that details how to keep Elephant Money payouts rolling indefinitely.
Part 2: Examining the effect of claiming on rolling on the “Maturity” amount. Hint: you cannot keep claiming indefinitely
Part 3: Why claiming and rolling don’t have to be done every day, or also, “how to keep your sanity”.
I will also be publishing a video breakdown to go along with this article.
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Thanks and have a nice day!
-DripStrategy
