Ark Fi: 2% per day in Passive Income | My Monthly Returns #1

I invested in Ark Fi precisely one month ago as my first investment in my journey to turn $5,000.00 into a steady source of passive income. I know many of you are curious, so let me answer the question on everyone’s mind: Did I earn 2% per day throughout the whole month?

The answer is yes!

For those unfamiliar with the Ark Fi Ecosystem, I suggest you take a look at a previous article where I provide an overview of the ecosystem, my excitement about it, and my initial concerns. In this article, I will share my investments, my actual numbers, address my initial concerns and future strategies.

Overview of Ark Fi

Ark Fi is a DeFi passive income protocol built on the Binance Smart Chain that offers a 2% daily ROI on its native ARK token. It is designed to promote community-driven behaviour and prevent destabilizing behaviour that has taken down other DeFi protocols in the past.

Ark Fi Ecosystem offers three ways to earn passive income.

1. The Ark Vault offers a 2% daily ROI as long as your Net Deposit Value stays positive.
2. The Ark Foundation, a liquidity pool between ARK and BUSD, generates a variable yield based on transactional volume with rewards paid in BUSD.
3. Lastly, owning one of the three Legacy NFTs provides additional yield and benefits within the Ark Fi ecosystem.

There is also the SpARK Rewards program which uses a portion of the Round Robin rewards to run a daily lottery for investors. To be entered into the lottery you need to hold at least $250.00 USD in the Ark Foundation or own a Legacy NFT.

For a complete overview of the ecosystem please see this article.

My Investments

The Ark Vault

I invested in Ark Fi on the 7th of January 2023 where I invested $500.00 BUSD into the Ark Vault (earning 2% per day) and $500.00 BUSD into the Ark Foundation. After the 10% buy tax, this resulted in approximately $450.00 BUSD in each mechanism.

The image below is a snapshot of my Ark Fi Vault Dashboard after one month, where you can see that I have been paid a total of $321.31 BUSD or 64% of my initial investment. Of that $321.31 BUSD I have compounded $150.66 which has increased my principal balance from 448.60BUSD to 623.49BUSD.

My goal was to achieve a Compound Withdraw Ratio (CWR) of 1, but as you can see, I compounded one more time than I withdrew (due to my mistake). By compounding my rewards, I grew my principal balance, which is the basis for the 2% daily interest calculation, resulting in larger daily rewards and increasing my max payout. Currently, I am earning $12.50 per day which will continue to exponentially increase until my NDV turns negative.

Overall, in my Ark Fi Vault, I have withdrawn into my MM wallet 27.4% of my initial investment. I am forecasting to have withdrawn over 75% in month 2 and recovered all of my investment by month 3. Something to note is that the $500.00 BUSD that I invested into the Vault is a sunk cost and I cannot withdraw this. Additionally, the gas fees to compound/withdraw are roughly $0.60 BUSD per day so I have spent $18.00 BUSD in gas fees.

My Net Deposit Value (NDV) decreased from 78.52 ARK to 58.80 ARK (335.73 BUSD). This means that I will still receive a 2% daily ROI until it becomes negative. This decrease has been partially offset by my referral earnings. When it turns negative, I will earn a 1% daily ROI instead.

The Ark Foundation

I also invested $450.00 BUSD (after the 10% buy tax) into the Ark Foundation. Unfortunately, I did not keep exact track of my payouts, and as you can see I used some of my Vault rewards to put straight into the Foundation to increase my staked value to $501.90. Based on the blockchain data, I withdrew $21.80 BUSD, resulting in an estimated annualized APR of 52.32% to 58.33%.

I will be tracking this daily for the next few months to get a more accurate return. It’s important to note that liquidity pool rewards are influenced by the number of transactions and do not offer a fixed return. A benefit of the Foundation is that I can withdraw my initial investment, which can offset my sunk cost in the Vault. Additionally, I have a chance to win the spARK rewards pool, which is currently paying out approximately $1200.00 BUSD daily. With my $501.90 USD staked ARK-BUSD, I own 0.27% of the pool.

General Observations & Comments

For those who read my initial article on Ark Fi, you know that I raised concerns over the sustainability of the protocol, with some kind of ‘ponzinomics’ having to play out (aided by the referral program).

Paying out 2% per day is crazy in a bull market and just mad in a bear market. Despite following the daily podcasts and keeping up with the company’s Telegram, Discord, and Twitter updates, I’m still awaiting to see concrete evidence of external revenue generation. Additionally, I’ve noticed the ILC reserves declining from $500,000 BUSD to $330,000 BUSD over the past four weeks. The ILC, or Intelligent Liquidity Controller, helps maintain the price within a range of $5.65 to $5.80, as shown in the chart above.

I advise reading the whitepaper to fully comprehend the ILC mechanics. If the funds are depleted, the price will be more susceptible to external market forces and selling pressure. I’ve raised this issue with the Ark Fi team, who have stated that the selling pressure will gradually ease as investors’ NDV becomes negative and the daily rewards decrease from 2% to 1%. It also is important to note that more investors coming into Ark Fi will have a positive impact on the ILC reserves.

EDIT: Since this article has been posted the ILC reserves are sitting above $350,000.00 again.

On the other hand, there are also multiple positive developments in the protocol over the past month. A mobile app is set to launch, providing access to the protocol for people who are new to crypto or unfamiliar with DeFi. The ILC is performing well in maintaining the ARK price and a clear price channel can be seen on the price chart, giving investors a good sense of security on the ARK price.

Since I joined, there has been a 50% increase in ARK-owned wallets, indicating growth in the protocol. The Ark Fi team is actively engaging with other DeFi protocols, conducting daily AMA sessions, and answering questions on Discord, highlighting the expanding Ark Fi ecosystem and overall I am excited to see where this protocol goes.

My Strategy

I have updated my investment strategy as follows:

I will keep my Compound Withdrawal Rate (CWR) at 1 until I reach a 100% return on investment (ROI) and have withdrawn my initial $500.00 BUSD investment in the Ark Vault.

Afterwards, I am considering investing in a Legacy NFT to increase my CWR to 2.5 and compound for several months, as at this point I will be earning 1% per day. The Legacy NFT also offers passive income, but I will need to do further research on the exact annual percentage rate (APR).

Upon reaching my ROI, I may move my daily withdrawals into the Ark Foundation for additional passive income. However, if the ILC reserves fall below $50,000 BUSD, I will exit my position in the Ark Foundation due to exceeding my risk tolerance.

If I decide to invest more money into the ecosystem, I will use my current wallet as the “Master” wallet and create smaller wallets linked to it, providing rewards to the Master wallet and extending the 2% returns for a longer period of time as I will be increasing the NDV.

TLDR: The Numbers

1. I invested $500.00 USD into the Ark Vault (a sunk cost) and $500.00 into the Ark Foundation;
2. In one month in the Ark Vault, I have been paid $321.31 BUSD (or 64% of my initial investment) where I have compounded $150.66 and withdrawn $136.89. I paid 18.00BUSD in gas fees. My overall ROI is sitting at (321.31–9.00)/(500) = 61% and my withdrawn ROI is (136.89–9.00)/500 = 26%.
3. In one month of the Ark Foundation, I have earnt $21.80 USD giving me an ROI of 4.36% however I am able to withdraw the full amount of my ARK-BUSD liquidity pool.

If you are considering investing in the Ark Fi protocol, I recommend you read the following information to make an informed decision:

1. Ark Fi Whitepaper
2. Ark Fi dApp
3. Ark Fi Contracts
4. Ark Fi FAQ
5. Ark Fi Calculator

Summary

In summary, the numbers don't lie. I earnt 2% per day on my Ark Vault investment and earnt approximately 4% in the Ark Foundation in the ARK-BUSD liquidity pool. While I still have my original concerns about the sustainability of the protocol, the Ark Fi team continue to grow and develop the protocol and I look forward to giving you my month 2 numbers!

If you do invest, please consider supporting me by using my referral link:

Please note: This article is for informational purposes only and should not be taken as financial advice. The author’s experience with Ark Fi is unique and may not be representative of the experiences of others. Investment in cryptocurrency, including Ark Fi, is inherently risky and you should always conduct your own research and consider your own risk tolerance before making an investment. Never invest more than you can afford to lose.