by CEO Dmitriy Boshenyatov Let's calculate the profitability of an investment using different approaches — FARM vs BUY. I want to calculate the economics of investment taking into account all the steps, including Gas Fee. Also, estimate how the numbers will change from liquidity in pools, trading volumes, prices for tokens.
I wanted to draw attention to the following things:
This is not financial advice. You make your own decisions, you can make calculations yourself, and all investments in DeFi projects carry high risks.
I will try to make calculations for different budgets. Since now there is a problem with the high price of gas, we will together see how much is better to enter into the project.
I will try to take into account different scenarios, but I may not see some points. If this happens, be sure to write in the comments and I will recalculate the profitability taking into account the new input.
Since we are going to talk about farming, many people are afraid of losing all funds added to the pool (due to fraud, hacking). I will proceed from the assumption that our code is absolutely safe and investors' funds are protected. If you are wondering why I think so, what strategy we follow, study the docs we provide on the site — we value transparency as much as you do.
It seems that we have spoken the main points, we proceed to the calculations. I suggest targeting 3 different budgets: $1,000 (A), $10,000 (B), $50,000 (C).
Stage 1 - Participation in farming 7 days
There will be 5 pools in farming. Here is a list of them:
Stablecoins (2): USDT, BUSD
Crypto (3): BNB, CAKE, ETH
Total token distribution: 8.640.000 $NFTL Pool share - 1.728.000 NFTL
Once we have our input, let's think about a strategy. There are several farming strategies to choose from:
Strategy #1 - Invest into stablecoin pools. You take away the risks of currency volatility, but get a smaller stake in the pool due to high competition.
Strategy #2 - Invest into cryptocurrency pools of large projects. There is volatility, but it is not very strong. These are large projects with a capitalization of more than $1 billion.
Let's see how much each strategy can bring our investors.
Let's take a look at farming using stablecoins as an example. Suppose that $1,000,000 is added to the pool and for simplicity of calculations, we will assume that this amount will not change over the entire farming time.
If there is $1,000,000 in the pool
Investor A will receive a share - 0.1%
Investor B will receive a share - 1%
Investor C will receive a share - 5%
It turns out that $NFTL income will be:
Investor A will receive - 480 NFTL
Investor B will receive a stake - 4,800 NFTL
Investor C will receive a stake - 24,000 NFTL
PancakeSwap NFTL token starting price = $0.001
We have a solution to attack bots at the start of trading, so the community will form the price.To add tokens to the pools, we perform one operation to withdraw the second, to withdraw the third profit. Let's take the maximum gas cost for each operation: $5 x 3 = $15.
Total expenses = -$15
There is no point in selling NFTL at this stage. The price for 7 days of farming could rise, but still this is not enough to make a profit. Most importantly, the investors got their money back (minus commissions) and earned NFTL from above. Following the example of stablecoins, you can estimate your NFTL share in other pools yourself.
Investors have a balance:
Investor A - $850 + 480 NFTL
Investor B - $9,850 + 4.800 NFTL
Investor C - $49,850 + 24.000 NFTL
Step 2 - Adding NFTL to the Liquidity Pool and NFTL / BNB Staking on CyberTime
To add NFTL to the liquidity pool, you need to have 50% BNB. Suppose that the token price has grown by x5 to a value of $0.005 to a capitalization of $432,000 (the growth may be less or more. The more the token grows, the more BNB will have to be added to the pool)
To add tokens to the pool, you need to have BNB or buy either. With such a price for a token, investors need to have:
Investor A - $2.4 (BNB) + 480 NFTL
Investor B - $24 (BNB) + 4800 NFTL
Investor C - $120 (BNB) + 24.000 NFTL
To add tokens to the pool, you need to pay gas, to add the NFTL / BNB share to the CyberTime pool too, it turns out = $ 5 x 2 = -$10
Let's assume that $200,000 is added to the NFTL / BNB liquidity pool and this amount will not change for 30 days. Our investors will have the following shares in the pool:
Investor A - 0.0024%
Investor B - 0.024%
Investor C - 0.12%
Why add NFTL tokens to the liquidity pool? You will be able to receive CTF control tokens, of which there are 86,400 in total. Moreover, 70% of CTF tokens will be distributed through the NFTL / BNB pool. In addition to CTF tokens, the investor will receive 0.3% of the pool turnover. The higher the share in the pool and the higher the trading volumes in the pool, the higher the earnings.
Important point! We did not conduct pre-sales, but we need to make money. Therefore, during the deposit of a share in our pool, the investor pays 2% commission. This is money for development, marketing of our team. The longer you keep your share in the pool, the faster you will return the commission and start earning from the pool turnover. We strongly do not recommend withdrawing a share from the pool immediately!
In the first 30 days, 15,120 CTF will be distributed and then there will be a 75% reduction. How many tokens will our investors receive in 30 days?
Investor A - 0.36 CTF
Investor B - 3.62 CTF
Investor C - 18.14 CTF
PancakeSwap CTF token starting price = $ 1
Total expenses = -$25
Investors get the following asset after 30 days:
Investor A - $ 750 + NFTL / BNB LP (0.0024%) + 0.36 CTF
Investor B - $ 9750 + NFTL / BNB LP (0.024%) + 3.62 CTF
Investor C - 49750 + NFTL / BNB LP (0.12%) + 18.14 CTF
Investors can withdraw CTF from their wallet and add a pool to the CTF / BNB (another $5 per operation for withdrawing profit). 20% of tokens are distributed through this pool. Then investors receive another asset, from which 0.3% of the income from the pool turnover + CTF tokens will go.
It turns out that an investor spending $25-35 of their capital (maybe less, since the gas price is constantly jumping) receives an asset in the form of a share in the NFTL / BNB pool. This share will generate 0.3% of the pool turnover revenue + CTF management tokens while the share is added to the pool on the CyberTime website.
Now, you can estimate how much profit an investment of $250 can bring. For example, let's take a look at similar projects in the NFT market:
These projects are 5-7 months old and already have a capitalization of $ 15-30M. They all have a ready-made product, while it will take us 4-6 months to create and test our platform.
An investor does not have to risk their money at the farming stage. They can try to buy tokens immediately on the exchange and enter the pool. How much will they spend?
You need to buy tokens on PancakeSwap and pay gas. Suppose, someone invests 20% of their savings. Pricing is very difficult to predict, as the minimum starting price is $0.001. Suppose investor A with a capital of $1000 wants to buy tokens for $200. That's 200.000 NFTL. Naturally, they will not be able to buy all the tokens at that price. The price will start to rise sharply. Since other investors will also want to buy the token at the lowest price, the price will rise even more, and you can't predict how high it will go. Therefore, it makes no sense to carry out calculations. We can only calculate the cost of gas and total investments.
You need to spend on gas in the following cases. When you buy NFTL, when you add tokens to the pool, when you add a share of the pool to the CyberTime website.
Total gas costs: -$15 + part of the capital will be spent on NFTL
When you buy tokens from the market, there are risks of high volatility. It is difficult to say whether you are buying an asset at the very bottom or at the very peak.
Make decisions consciously, calculate the potential profit of the project, consider the growth prospects. Each reader should make their own conclusions, I just wanted to offer you our take on the calculations. I am available on Reddit and in our official Telegram chat, where my team and I are ready to answer any questions you have about our project.