Rethinking this thing called DRIP…
Have I been doing it wrong this whole time???
If you have been following me then you may know that I have been invested with the DRIP Faucet for a while, since 10/2/22 (about 7 months).
Sometimes it takes me a while to learn things. Most of the time it is by trial & error.
Basically, I learn a lot by screwing up a lot…
This is part of the reason I write these articles. So that others can see what is working for me & what is not working for me.
Anyway, I’m not going to rant, especially on myself….Let’s talk DRIP strategy again!
(Disclaimer: I’m not going to mention DRIP price in this article. We can hash that out again at a later time.)
(NONE OF WHAT I WRITE IN MY ARTICLES IS TO BE TAKEN AS INVESTMENT ADVICE. I am not an advisor for this nor am I suggesting any financial action on your part. DYOR. NFA.)
The Problem…
So with any & all the Defi projects I invest with my goal is basically two fold.
- Make ROI. (Get my investment back.)
- Make profit. (Get more than my investment back.)
I’m sure most of ya’ll have these same goals as well.
I also try to think about the life of the project or the life of my investment.
- How long will it take to get my investment back?
- How long do I think this project will last?
- Will this project last long enough for me to get my money back & make a profit?
These are all important questions any investor should ask.
Yet, I have missed something that also needs to be asked, especially with DRIP Faucet.
- Is it worth getting ROI ASAP, even if I drain or reduce my future income from the project?
I have been too concerned on making ROI that I have missed the BIGGER opportunity with this project. Yet, I’ve been seeing this opportunity in my other projects. Now, it is time for me to undo my mistake & start to improve my earnings & overall position in the DRIP Faucet!
What does this mean?
With the DRIP Faucet, I need to work on making ROI but I also need to work on improving my earning potential.
This means trying to get my max payout to go up as well as my earnings.
If I can get them both to go up then that would be great, especially if they go up the same amount. That way I can have my cake & eat it too!
Time for a new strategy!
Let’s start out, theoretically, with only 500 DRIP tokens initially deposited. This would, theoretically, earn me around 5 tokens per day. This means that I would make my 500 token back in around 100 days.
Now let’s suppose I hydrated those tokens. Then my 1% is compounded back into my deposit balance. This builds my deposit balance up, which then increases my daily DRIP earnings. If I continue to hydrate my earnings then this process will repeat itself.
If I combined these 2 actions every week then it will increase my deposit amount, increasing my income, & it will help me get to ROI quicker. If I can work this out right, then my earnings & deposit balance will go up equally.
This would be like having my cake & eating it too!
But how would this work?
I’ve been running some calculations. (Nope this is not Star Trek & I’m not Spock. But, we are going to look at some math…I mean a lot of math…don’t worry. It’ll be OK. So get ready! Here we go!!!)
Let’s take our 500 DRIP tokens & see how we can work things out for a good well balanced outcome.
It is sometimes difficult to reach a 50/50 outcome when you are working with 7 days per week. So this will need to be a 3/4 strategy or a 4/3 strategy depending on how you look at it.
Here’s what this strategy looks like:
- Saturday — Deposit 500 DRIP tokens & start earning
- Sunday — Do nothing & let those earnings continue to build
- Monday — Hydrate your earnings from Saturday & Sunday
- Tuesday — Hydrate your earnings from Monday
- Wednesday — Hydrate your earnings from Tuesday (This equals 4 days worth of hydrating!)
- Thursday — Do nothing & let the earnings build up
- Friday — Do nothing & let the earnings build up
- Saturday — Let the earnings build up & withdraw at the end of the day.
- Sunday — Repeat steps 2–8 over again
This means that I’ll hydrate 3 days out of the week (really worth 4 days of earnings), build up earnings for 4 days of the week, & withdraw at the end of the week. This increases my deposit balance & my earnings at about the same rate.
Here’s how the numbers would work out:
- Saturday — Deposit 500 DRIP tokens & start earning 5 DRIP for the day
- Sunday — Do nothing & earn another 5 DRIP. Total available DRIP = 5 earned. (The other 5 will show up on Monday before you hydrate.)
- Monday — Hydrate those 10 drip increasing the deposit balance up to 510, earning 5.1 drip daily.
- Tuesday — Hydrate those 5.1 drip earned from Monday. This increases the deposit balance up to 515.1, earning 5.151 DRIP daily.
- Wednesday — Hydrate those 5.151 DRIP earned form Tuesday. This increases the deposit balance up to 520.251, earning 5.20251 daily.
- Thursday — Do nothing & let the available balance build up. Current available tokens should equal around 10.35351 DRIP.
- Friday — Do nothing & let the available balance build up. Current available tokens should equal around 15.55602 DRIP.
- Saturday — let the earnings build up throughout the day & withdraw at the end of the day. This be around 20.75853 DRIP.
- Sunday — Repeat steps 2–8 again. This time the starting deposit balance should be around 520.251 DRIP, earning 5.20251 daily.
If done correctly then my deposit balance should have gone up by around 20.251 DRIP & my withdraw amount should be around 20.75853 DRIP, after week 1.
- Week 2 deposit balance growth = 21.07121 & withdrawn = 21.599292
- Week 3 deposit balance growth = 21.92463 & withdrawn = 22.474107
- Week 4 deposit balance growth = 22.81262 & withdrawn = 23.384353
- Week 5 deposit balance growth = 23.73658 & withdrawn = 24.331466
In 5 weeks, we should have grown our deposit balance by 109.796 DRIP & withdrawn around 112.54775 DRIP.
Our max payout should have now gone from 1825 (500 x 3.65) to 2225.7556 (Up 400.755552 DRIP)!
But Wait there’s more!!!
If our starting deposit was 1000 DRIP tokens, & we followed this strategy, then after 5 weeks, we would have withdrawn 225.09549 tokens & increase our deposit balance by 219.5921 tokens. Our max payout would have gone from 3650 to 4451.5111 (Up 801.511105 DRIP) in only 5 weeks!
In Summary
I like to do 50/50 withdraws/reinvestments in my projects.
Using this strategy with the DRIP Faucet accomplishes that. I’ll also be adding $30 more to my deposit balance twice per month, in according to my new Crypto Budget. This will also help raise my max payout & earnings.
I’m looking forward to growing in the DRIP Faucet! (Finally!!!)
Let me know what you think about my new strategy.
God Speed!
Thanks for reading!
Till next time.
God Speed!
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