I’m gonna have to read this a few times…
This stuff is still new to me.
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And it is still new to 99.9999% of the world’s population. BTW, I have now made my decision on how to treat liquidity pairing as a plan. It will fit into my sh__coin strategy. The first purchase is going to be Wonderland TIME token, taking the liquidity side, not the bond side, with an initial estimated yield of 75,000% APY. Only 1% of the crypto portfolio (until it doubles 
)
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I’m trying to understand this. This is a crypto coin used in a game, and the idea is to wait and see if the value of the coin increases?
That’s the basic idea, right?
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No, the idea is like this - and the same idea also applies to those massive APY offers to provide liquidity pairing so they can grow a massive treasury because they think that size matters (and it may well do).
So these Heroes (like trading cards) are non-fungible tokens. 2,000 of them are originals or “Generation Zero”. For a cost (in Jewels), an owner of one Gen0 can hire another Gen0 from another member (for a cost in Jewels), and mint a new “child Hero”. The Gen0 can create ad infinitum (for a cost for each new Hero), but Gen 1, Gen 2, etc are limited to the number of offspring they can produce, and at an ever higher cost as the x in GenX increases. Gen 0 heroes are for sale in the Tavern, but the cheapest cost about US$50,000! Imagine getting in early and being the fortunate owner of one of them?
At some point, it becomes unprofitable to mint new Heroes. Since their release in August 2021, the original 2,000 have spawned over 70,000 (inflationary). But also since then, the game has introduced “quests” that the Heroes can perform every so often (like 3 times per day) and earn rewards (Jewel tokens and other items that are for use in the game - eg. to raise the Experience level of a Hero).
Let’s say that a Hero can earn 10% per month of its bought price. And that you paid 100 Jewel for it (about $1,400). If the game designers got their calculations wrong, the Hero would reduce in value by 10% in that month (to less than 90 Jewel), so although the owner of the Hero would have gained 10% in Jewel tokens, the real value of the Hero would have reduced more, so you would be in a loss. If the game designers got their calculations right, the Hero would actually increase in value, and if it did so by 10%, the overall gain in the month would be +10% from income (the widgets you won on the quests) AND 10% from the capital gain (the increase in value of the Heroes). The actual game is not as clearcut or simple as that. For example, you can park your Jewel in the bank at an interest rate of around 40% per year. You can pair your Jewel with the Harmony (ONE) token and commit the Liquidity Pair (LP) by sowing seeds in the garden. That earns about 500% interest per year. Again, if the game developers get it right, the market adoption of the game will far outweigh the potential depreciation of the Jewel (and to a lesser extent the ONE token).
An announcement was made two weeks ago that the Harmony game will now be “expanded” to the Avalanche network - this DeFi Kingdoms on ONE is sub-named Serenvale, whilst the expanded game on the AVAX network will be named Crystalvale, whose coin will be Crystals. Now in order to procure Crystals, it will require ownership of Jewel, which can be bought either within the game or with ONE tokens. At the game level (DeFi Kingdoms) the expansion to Avalanche is intended to massively grow the members. One way or another the “expanded” game will favour those long term holders of Jewel, and there is expected to be airdrops which favour Jewel holders.
So I have two reward / risk scenarios - extreme bad, and extreme good. The worst case scenario is that everyone stops playing the game, and you end up with a load of ONE tokens at less than you paid for them, and the Heroes are worthless. If that were to be a total loss, the Harmony ecosystem would also need to disappear and I have not included that scenario. A 90% loss is far, far more likely than a total loss of ONE token value. Harmony is a network, as is ETH, SOL, ADA, DOT etc. I do not think it will disappear soon. So let’s say I may lose 90% of my overall stake in DeFi Kingdoms.
The upside? ONE token does a X10. Jewel token does an X10. So the Jewel/ONE pair does a X100.
BTW there is a parameter that drives mass adoption of these investments. It is called Total Value Locked (TVL). TVL has grown from $10M to $40 bn (yes, 4,000 times) in the last 12 months across the entire space. Of all the NFT types out there, those attached to gaming where they can earn “stuff” that can be exchanged for stable coins, and therefore for fiat, are the only ones that make sense to me.
I deem the reward / risk ratio to be at least 10X and at the extreme potentially a 1,000X. And for that reason, I have opted to go big and go fast.
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It looks like a very good start to the new year. The value of a token that delivers 500% APY on deposits should go down, not up. I am not complaining. That won’t happen on a Saturday public holiday in Forex.
An update - sixty days since starting an account in DeFi Kingdoms.
The article linked below does a far better job of describing DeFi Kingdoms than I ever could. Whilst the recent drop in Jewel and ONE tokens is not unexpected, it was fast and deep. Jewel went from a headline $22 to $7.50, and ONE went from $0.35 to about $0.17. Both have stabilized and may recover along with the rest of the crypto market.
This has not concerned me in the slightest. In fact, I took the liberty of “catching falling knives” and bought into more ONE as the price collapsed. Most additional was bought between $0.25 and $0.22. But this was not to purely speculate on ONE. It was to take advantage of more ONE to buy stuff in Harmony Dapps that are on my radar screen, and they are just an awful lot cheaper now in USD terms than they were last week.
My “hero” count in DeFi Kingdoms is now 32. Their USD price has more than halved, but their utility value (income earning potential) has remained the same. What really drove me to accelerating my hero ownership (NFTs) was a pre-announced airdrop of the Crystal currency that will be used in the Avalanche version of the game - Crystalvale, starting some time in Q1, 2022. It was announced, amongst other complicated formulae, that a Crystal token will be airdropped to the owner of every Hero (this is simplified), so I just went hell for leather to purchase Heros. Their floor price has not changed much in Jewel after its devaluation against the dollar this week, so they got cheaper in real terms. I used ETH to buy more ONE. Those stories of ETH seeing $20K before the end of 2021 are now just a laughable history of other uber-hyped claims of value.
Just that one decision to game in DeFi Kingdoms has lead me into other areas that now constitute a planned 20% of our crypto portfolio in 2022. There is a common theme. The NFTs will be bought on the premise that they have an income earning potential besides just a floor price. I have just bought into my fourth type of NFT, and one sold within 18 hours of listing. Strange how that can happen when the NFTs are still in mint. Two side benefits of this - the first is that I learned how to create multiple accounts in one metamask wallet and has forced me to start to document a Technical Infrastructure Plan since “crypto” has morphed into a being like a hydra, and needs to be contained (backed up, documented, schematized) befre I lose the plot. The second is that I have opened an account with OpenSea to sell NFTs other than on the ONE network. Compared with Harmony costs are a shocking revelation in the real world. The cost of ETH gas for the NFTs was over 30% of the actual cost of the NFTs. And there was a one-off joining fee on OpenSea equivalent to $85. If anyone said you can start this trading NFTs on a shoestring either had 24 carat gold shoe laces, or was just plagiarizing what a gazillionaire like Snoop Dog may have said for Bored Ape Yacht club.
Anyway, despite the tanking of the token values, the combined liquidity pair interest and the Hero income is about $200 per day. That is not small change at 7 days per week. So my interest remains very strong in this field, even though I expect earnings to reduce somewhat on an exponential basis.
https://dappradar.com/blog/play-to-earn-defi-kingdoms-rise-to-success
The game now has analytical tools that would put the best corporations to shame. That is a techie side to it, but use of APIs and RPCs are extensive in this game designed for Web3, and it is wonderful to see how fast such apps are being built.
Edited. Just seen a similar post about DFK at this link. Worth a read for anyone interested in gaming.
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Appreciate the details and transparency Mondeoman! 
I’ve been interested in De-Fi recently because of you and I’m reading more about it. 
I guess at this point, my only concern is that the team behind this is completely anonymous. 
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Hi,
I doubt that this is the case. I have joined many discord forums and I see members asking if the creators have been “DOXed”. I have taken this to mean "had their documents reviewed by a competent party such as an auditor or a network on which they run their Dapp. I can’t be 100% sure of this but having read the audit report, I am satisfied that they have done at least as much as other Dapp creators. Evidence of a multisig account to distribute and manage funds accumulated as a result of an ICO, IDO or other funds gathering exercises is also evidence that responsibilities have been acknowledged and governance has been planned for. That is not always the case with startups.
As an example of how crazy the prices are I have posted another snippet of the quest results so far today. Note that the inventory has changed from $1,071.44 very early today to $2,169.89 at 19:00 hrs. This is so volatile that I just don’t bother to evaluate it. Within that total I have a couple of speculative trades going on, but not for more than one fifth of inventory value. All these items have a real world value and can be swapped to multiple currencies, including USDC in the exchange that is built into the game. This is a task that I intend to hand over to my son once I have a clear infrastructure definition and I can hand over game control to him. Meantime, the game is growing very quickly in terms of capability that it has caught a lot of my attention. Some of those in-game items do not yet have a clear purpose, other than the mention that they will be used to create potions at the Alchemist location, and hints that those potions will help heroes fight with more strength and endurance to yield yet more treasure than the static quests that have been in place since December. This list of items represents an income that I have estimated to be about 10% per month of invested Hero values. Now my Forex account never got anywhere near 10% per month, so I am more happy doing LP lockin and Hero questing than I ever was trading a few hundred dollars on Forex pairs. 
What is the amount you’ve put in to be getting $200 per day?? Surely not just the $2000 in “inventory”?
I have accumulated 30 heroes since starting the game mid November 2021. I have bought over 50, sold about 20 and end up with 30. It’s a lot more trading than I did with Forex
Good lord and I thought Crabadas were expensive!
Lol. I was just rooting for $5k and even that didnt happen
Wait so did you end up minting? I looked into this, had artwork and all that but saw the gas fees and was like oh hell naw.
Sure did. And yes, I had to eat that ETH gas fee too. Didn’t like it one bit, but it gets less painful once you sell one or two. 
Goshdarnit. Ok so you’re the first real person I know who’s actually sold ANYTHING on OpenSea. Did you… create your own artwork??? And how did you decide on the floor price! I did a bit of research into nft selling on OpenSea and it just seemed sooooo complex like you have to create a community, explain your project bla bla bla. I just wanted to sell lol.
Wow, really? I just followed a Youtube video to find OpenSea, balked at the “joining fee” but then decided to take the plunge with the Wheelies release (co-founder Donavon Jolley who does D.I.Y. Investing on Youtube), decided to place my ill-gotten apartment sales gains from Tranquility City into Wheelies, and hey presto, sold 2 of them. Simples. I did not look at the floor price. this will sound really stupid, but I decided which ones I thought were more cool than the others and priced them according to my view of coolness, and went from there. Personally I like the mafia character - and it seems others do too.
https://thewheelies.governordao.org/
https://opensea.io/collection/wheelies?search[sortAscending]=false&search[sortBy]=LISTING_DATE
AHA so it’s an already existing project. If you don’t mind me asking what’s the range of the total cost you spent to acquire it? Cause I’m thinking if I do it and I don’t get lucky lol I need to prepare for that loss. :))
I set up a separate account with one ETH in it, on my metamask. I do not intend to spend all that ETH, but it is a good idea to over-bank at the start of any venture. It prevents embarrassing situations like “shoot - I can’t afford the gas” or “I can buy one and sell one but it is the slow boat to China”. So let’s say that my bank is $2,500 - but it is twice as much as I really ever want to be in “stock” of these particular types of NFT. So if you can sell one, and buy two, without increasing your capital exposure that is (for me, and for this opportunity) the ideal scenario. By the same regimen, that is how I ended up with 30 heroes in DeFi Kingdoms. In that case, I did commit 10 times this amount, but that was an exceptional decision that went beyond our normal investment rules. In the greater order of things, it is all money we are prepared to lose, though I would be a bit peed off if we lost it all 
I know right. It hits different when it’s gone despite you knowing it’s money you can afford to lose lol.
Ok that’s not so bad. Thanks for answering! I might go back to window shopping on OpenSea.
This is another update on the state of my Heroes within the DFK game. I now have a total of 47 Heroes, and have spent no additional funds to accumulate them - I have just used the Jewel earned in the Gardens (APY is now down to 240%) and the income from the items gained on the quests. So if I count my gains in terms of number of Heroes owned, that is a 56% increase since 27Jan22, or a linear increase of 28% per month.
Now you need to temper that with the white knuckle ride of the price of Jewel (in terms of the ecosystem Harmony (ONE) token, and in USD terms.
Jewel had fallen a massive 80% since its peak of $22, and that did make me wonder if I had taken the right decision to hodl and reinvest the earnings. Yesterday I bought 2 Heros for the total amount of in-game income, for the first time since exactly a month ago. Difficult to “average” but my income per month is conservatively estimated at 5%. I would bite my right arm off if I could achieve 5% per month on my bank in Forex trading 
Jewel has just gone up 50% in a week. The video below has a section on Jewel (and ecosystem token ONE). Whilst both have moved up this week, Jewel has moved up four times as much as ONE.
This story is only just beginning. The expansion of DFK from the ONE ecosystem to the Avalanche ecosystem is a significant milestone. I was not brave enough to go on the voyage with any of my Heroes wherein it was predicted that 70% would be lost at sea, and be rewarded with stuff if they died, and more rewarded if they survived. This is a strategy in the game expansion to make the Heroes non-inflationary.
I am somewhat sceptical about how the “insiders” can prevent insider trading when only they know the long term game expansion plan, but I still see DFK as one of those potential “ten baggers” so I am staying put for the ride. My long term strategy with this one has tested my patience (which was pretty high to start with), and I am ignoring the actual value of a Jewel on a daily, weekly, and even monthly basis. The best way I can internalize / justify the reward / risk of this token is to recognize that the total amount of funds I put into this ecosystem (Jewel, ONE and Jewel/ONE liquidity pair tokens) is just less than a third of the quantity of Jewel and ONE that I currently hold, the average buy price for me was under $10, and I now have more than 3 times the quantity I bought. On the basis of that, I guess my average cost price to acquire Jewel is around the $3.30 level, so it is a nice fuzzy warm feeling to see them get above the $5 value level once again. Long may it last. I did not expect the Fiat onramp direct to the game interface, and that is a nice touch. If you didn’t have a clue about crypto, but wanted to “invest” in this game by either just depositing the Jewel in the bank at an estimated 20-30% per year, or buy the Jewel / ONE liquidity pair to put in the garden at an equivalent current interest rate of over 200% APY, you could do worse than doing a Fiat conversion at the docks for the equivalent of a couple of nights out and just watch it grow. If you are anything like me though, you would be sorely tempted to buy a Hero or ten, and start questing for an NFT income. I am of the opinion that the Hero floor price is attractive right now, and to earn income you do not need a high spec hero. The lowest cost ones (circa 30 Jewel) earn about 80% of the rewards of those that cost ten times that price, for the same Experience level.
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An update on the DeFi Kingdoms. The game (Crystalvale on the Avalanche network) has now gone live. It seems like ages ago when the DeFi Kingdoms folks announced there would be airdrops of the new token called Crystal when the new game Crystalvale launched. Well it launched on 31Mar22. I got off to a relatively late start and tonight managed to deposit just $100 worth of Jewel in a liquidity pair earning an initial headline rate of 4,500% APR!
Screenshot below, money has been there since four or five hours ago.
Importantly, I have just been advised that I will be airdropped 33 crystals for the number of Heroes I held at the snapshot date in January, and an additional 95 crystal for the number of Heroes levelled up during February. That is a total of 128 crystals, whose initial value were $18 each and which are now about $44 each. That is about four times the value I had been expecting. So I am going to dump all that crystal in liquidity pairs again, and put most of it into the Gardens of Crystalvale. I have no idea how long the APR will remain high, or indeed what the near term value of a Crystal token is going to be, but if it is anything like my experience with Jewel in the DFK game on Harmony network, it will be an experience worth living through. To be “given” about $5K worth of tokens seems pretty extreme to me, but for the fact that I know someone who currently has accumulated $350K of tokens from a modest $5K when this all started.
I am not recommending at all that anyone treats this as an “investment” due to risks that stack upon each other. But if anyone went along for the ride of buying a lot of Heroes and sending them on a lot of quests, a $5K reward is a pretty good feeling.
Update on Crystalvale liquidity pairing. So I finally figured out how to claim the airdrops. About 60% of all the airdrops due to me have been collected (72 crystal with another 64 due to be dropped next week).
I converted them into Jewel at about 4.3 Jewel per Crystal. I converted half the Jewel into xJewel and used them as a liquidity pair to deposit in the Gardens in Crystalvale. Total equivalent USD value of this airdrop right now is just under $3,000.
The screen shot is just one hour of deposit in the garden.
About $15 per hour or 8 crystal per day (circa $300). My gosh if this stuff ever remained stable, it would be retirement time. That is over 10% per day interest! Of course, this is going to come crashing down very quickly - both the price of a Crystal, and the APR%. But for the moment, withdrawal of the crystal earned is going to be on a very regular basis, turn the Crystal back into Jewel, deposit more Jewel, then rinse and repeat. Until it breaks.
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