The life of 100 DRIP tokens in the Faucet…part 1
What happens to those 100 DRIP tokens you just bought…
So you went & bought 100 DRIP tokens.
What now?
Let’s explore what happened & what might happen to your new DRIP, in the DRIP Faucet.
(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.)
(Notice. Part 1 of this article is written without mentioning token prices. Token prices will be talked about in part 2 of this article. I may also talk about how my DRIP strategy might be changing in part 3 of this article. )
What has happened?
Before we get to the Faucet, we need to look at what has already happened when you bought your 100 DRIP tokens.
In order to acquire DRIP tokens you needed to swap other tokens for it.
You can do this “tax free” using the DRIP network swap page: https://drip.community/fountain
So you were able to trade your tokens for 100 DRIP & you received 100 DRIP.
Next you will need to deposit them into the Faucet or Reservoir.
In this article we will talk about the DRIP Faucet.
Putting them into the Faucet
How exactly do you invest in the Faucet?
You must deposit your DRIP tokens (minimum of 10 DRIP required) into the faucet, in order to start earning.
Basically, type in the amount that you would like to deposit (100 in this case) into the deposit box on the right hand side. Then click on the deposit button below it & accept any gas fees that might occur. Your DRIP tokens are now being deposited into the DRIP Faucet.
Be aware that you must pay a 10% tax on deposits. Therefore, your 100 DRIP will be taxed at 10%. This will leave 90 DRIP being deposited. This then becomes your Deposits amount.
You earn 1% daily off of whatever your deposits balance is in the Faucet, for 365 days.
In theory, this means that the 90 DRIP that you just deposited will become 328.50 DRIP after 365 days!!!
(You can always add more DRIP to the faucet in this same way. Also, be aware that any DRIP that you deposit into the Faucet is locked & can not be removed. So keep that in mind when you deposit.)
But wait there’s more…
You can just leave your DRIP there untouched & it will grow into more DRIP over time, 1% daily…
Or you can compound your earnings & grow it even bigger!
This is the power of compound interest. In the Faucet they call it “Hydrating”.
Your DRIP earnings are listed as “Available” on the faucet page. Your available amount grows everyday. It will sit there and accumulate until you do something with it.
By Hydrating you are adding your available balance to your deposit balance. This in turn raises your deposit balance. The higher your deposit balance then the higher your earnings & the faster you available amount will grow.
It is very easy to “hydrate” your DRIP earnings.
Just click the Hydrate button below the deposit box & accept the gas fee for the transaction. This then resets your available balance to 0.
But what about my 100 DRIP tokens?
Well, actually it’s really 90 tokens that were deposited, after paying 10% tax, when you deposited them.
So now, we let those 90 tokens earn for 10 days, 0.9 tokens daily.
This would put our available balance at 9 tokens. Our deposit balance is also still at 90 tokens. Now we can Hydrate those 9 tokens. We will be required to pay another transaction tax, but this time it will only be 5%, because we are compounding.
This now brings our deposits balance to 98.55 tokens (90 deposits balance + 8.55 hydrated (9*0.95)). We are now earning 0.9855 tokens daily, instead of 0.9 as before.
If we let it earn for another 10 days then it would earn 9.855, instead of the 9 tokens before. It’s a small difference but the small differences add up to make a BIG difference later.
If we let them earn another 10 days, then hydrate, our new deposits balance would be at 108.405 tokens 7 our available balance would go back down to 0. So up 8.405% in 20 days. (That’s roughly 0.42% daily…)
(Letting them earn for 20 days, without hydrating would earn 18 tokens in our available balance. So you will need to decide which strategy you would like to use. Earn vs hydrate, or maybe a combination of the two.)
But what if I want to withdraw my money out of DRIP Network?
After you have hydrated as many times as you would like & earned for a while, you may want to withdraw your earnings from the DRIP network back into your crypto wallet of choice.
(Notice your deposit amount is locked & can not be removed. Only your available balance can be removed.)
This is how you do it.
- Click the Claim button below the Hydrate button
This will move all the tokens in your available balance, minus 10% withdraw tax, to your wallet of choice. You’ll need to pay gas fees but your tokens will be there.
2. Now you will need to convert these DRIP tokens into in BNB tokens.
You convert them to BNB via the swap page then you will pay a 10% tax on the transaction.
3. At this point you can then convert the BNB into whichever token you prefer.
I usually keep it at BNB for gas fees. (This is the same wallet that I use for the Pig Pen, Animal farm.)
How does this effect our 100 tokens?
Well, when we last left off our 100 tokens were at 108.405 tokens because of taxes & hydrating three times.
Suppose you now want to withdraw you earns after another 10 days…
- 108.405 tokens x 1% x 10 days = 10.8405 tokens
You would follow the same steps as listed above.
- Click the CLAIM button below the Hydrate button
This moves your 10.8405 tokens into your wallet as DRIP tokens. You would have to pay another 10% tax on withdraws. Therefore, your 10.8405 DRIP tokens would become 9.75645 DRIP tokens.
2. Next you will need to convert these 9.75645 DRIP tokens into BNB tokens.
Another 10% tax will need to be paid to convert into BNB. Also, the amount of BNB it’s converted into will be determined by the current DRIP price.
3. At this point, as stated above, you can keep it in BNB or convert it to whichever token you would like.
Those 9.75645 DRIP tokens have now been withdrawn from the DRIP network & should be in your wallet to do with as you please.
Hope this helps explain things a bit to any new DRIP investor out there. I had to learn how the system works & taxes/ fees involved worked as well.
If used wisely it can generate a lot of DRIP tokens for you!
As always, thank you again for reading my articles.
It is much appreciated.
God Speed!
If you would like to see what investments I’m currently active in then go read my referral link article.
My top 5 highest earning articles from January.
