Elephant Money Part 2: Print Money over the long term
In my last article, I went over the safest possible way to play the Elephant Money Stampede Perpetual Bonds section of the platform.
Today, I will show you how to maximize your performance and print money over the long term!
The premise of Stampede Bonds is pretty simple. You make a non-withdrawable deposit, then receive interest payments at 205% APR.
While traditional CDs and bonds have a fixed maturity date, I will show you how the Stampede Bonds system allows you to push out your maturity date indefinitely. If you are following the strategy from my previous article, it will take about 5 months until you are playing with house money!
Newcomers to these types of projects may find the user interface intimidating. It took me a while to fully absorb the user interface and platform mechanics. For an experienced DRIP user, the user interface will look very familiar. However, even if you are experienced, I recommend reading through my analysis below.
I also suggest to read the Elephant Money whitepaper, visit the Stampede Perpetual Bonds section of the website, and read my previous article to get an idea of the system’s mechanics.
To summarize, the two key mechanics are:
- Claim: You claim any available TRUNK (dollars). It’s yours, free and clear.
- Roll: You compound available TRUNK back into your bonds. This option will increase your right to future earnings. The rolled TRUNK is non-withdrawable.
What happens when you click each of these buttons? Let’s find out!
Here is the user interface before clicking the roll button:
The Stampede Bonds UI contains a lot of info crammed into a small space. By clicking on the roll button, we will see how the 2.4704 TRUNK available in the rewards section will affect the other numbers on the screen.
Rolling will throw the available TRUNK from the “rewards” section on top of your bonds amount. The 205% APR payouts are based on the amount of bonds you own. Rolling is how you can compound the 205% APR interest and receive a larger amount of rewards over time.
The “Payouts” section is a counter. If the Payouts counter hits the same value as “Maturity,” game over. Your account will be closed.
Rolling will extend the life of your account and increase your future earnings using the power of compound interest. It does not pay you any money immediately. That the job of the claim function.
Next up is the same user interface. I waited some hours to let the amount of rewards build up to try out claiming. Here is the user interface before clicking the claim button:
Now let’s click the claim button and see what happens to our 2.6183 TRUNK waiting in rewards:
Clicking the claim button increments the Payouts counter the same as rolling. However, the Maturity amount remains constant. Claiming causes the Payouts counter to increment closer to your account getting closed!
The Bonds section does not change when claiming. Unlike rolling, claiming is not converting the Rewards into more bonds. It is sending the TRUNK sitting in the Rewards section directly to your wallet.
As a quick verification, we can verify that the 2.6183 TRUNK is safely in my wallet. The TRUNK is now available to be freely traded or staked. In my last article I outlined my strategy of immediately staking my claimed TRUNK for an astounding 65% APR (and the APR still increasing!).
We can also verify the transaction on bscscan.com, a Binance Smart Chain block explorer:
We looked at how Bonds, Payouts, and Maturity are manipulated during either a claim or roll event.
Now, let’s look at how claiming and rolling will affect the performance of a 990 TRUNK deposit over time (1,000 BUSD).
The simplest scenario to play Stampede Bonds is claiming your rewards every day. Here is what that looks like over the course of one year:
Why DEATH?
Well, at that point in time, Payouts has increased past Maturity! The smart contract will close the account and stop all rewards.
Keep in mind what is happening with claiming every day:
- No new money is being bonded. Rewards each day are constant at 205% APR / 0.56% per day of the initial bonded amount.
- When the Payouts line crosses the Maturity line, game over! The account will not pay out any longer and be closed.
Key point: When Payouts crosses over Maturity, the account is closed. You want to avoid this if you will be using the protocol for the long term.
Let’s try to push out the death of our account by throwing some rolls into our strategy. We will claim 2 days and roll 1 day, repeating the cycle over and over. And we will look at a time frame of two years.
Why DEATH again?
Payouts still crossed over Maturity. The account will eventually be closed. However, adding rolls has now extended the life of the account by hundreds of days!
The plots look quite different now due to rolls adding a compound interest effect. Compound interest has an exponential growth behavior — growth on top of growth.
Rolls and claims are opposing forces on the Payouts curve. Each one has a different effect on pushing away or pulling closer to the Maturity amount:
- Rolls push you towards long-term sustainability via compound interest.
- Claims drain funds out of your account linearly via the fixed 205% APR.
Key Point: Rolls extend the life of your account.
The second-to-last scenario is a long-term winner: claim for 2 days, then roll for 2 days. Any equal ratio of claims and rolls will give a similar result (1:1, 2:2, 7:7, I will discuss this behavior in a future article).
Payouts does not cross Maturity. The account stays open!
Compared to the previous example of 2:1 claims to rolls, the above graph of 1:1 shows that the Payouts and Maturity lines do not converge. If you wanted to do an even more conservative strategy of 1:2 claims to rolls, you will cause the Payouts and Maturity lines to diverge.
What should you do if you feel your account is getting too close to closing? Throw a few days of rolling to build a margin between Payouts and Maturity.
Key Point: If the frequency of rolling is higher than the frequency of claiming, the account will stay open.
Lastly, we will analyze my personal strategy for playing Elephant Money:
- Make a non-withdrawable principal deposit into Stampede Perpetual Bonds.
- Stake all claimed TRUNK into the TRUNK staking pool. Estimated APR 65%.
- Claim until about day 157, which is around the time I will have reclaimed my principal bond investment.
- Use an equal ratio of rolling and claiming to keep the spice flowing!
Here is a simulation of the strategy:
The graph is a bit noisy and contains a lot of information. I needed to convince myself that this strategy has a real chance of working before making an investment.
I added “Realized Profits with Staking” to show the actual profit I can expect when accounting for the non-withdrawable deposit and staking the rewards.
Why does this chart have negative numbers? When you make a Stampede bond deposit, you are starting at a return of -100%!
Your initial deposit is gone if you choose to play Stampede Perpetual Bonds. But with the risk of not making your deposit back comes the potential to make massive stablecoin returns:
- In 157 days, I would break even.
- In 1 year, my effective APY would be 124%.
- During year 2 my effective APY would be 507%.
- During year 3 it starts getting ridiculous.
If you want to play Stampede Perpetual Bonds in the most conservative manner, this strategy is for you.
All we can really hope for is for TRUNK to remain stable and maintain peg until we can withdraw our principal (~5 months). After that, it’s gravy!
Elephant Money only has a few buttons to click, but a large amount of data can be generated to evaluate the platform.
Keep these points in mind if you choose to play Stampede Perpetual Bonds:
- Claiming indefinitely without rolling will eventually close your account.
- If your claims outpace your rolls, your Payouts will edge closer to Maturity and the death of your account.
- To avoid hitting Maturity and keep your account open indefinitely, roll more than you claim.
Next up in my Elephant Money series:
Part 3: Why you don’t need to login to roll or claim every day, or “how to maintain your sanity”.
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Unlike DRIP, the partner address can be changed at any time, and the overall referral system is single level and similar to Amazon or Tesla’s affiliate system.
Thanks and have a nice day!
-DripStrategy
