DeFi, DEX, NFT and gaming all in one - DeFi Kingdoms

I have been participating in this “game” since 19Nov21 and laddered in big time from an initial $125 punt.
The adoption is accelerating. I found participation in this “game” very helpful in gaining experience in three areas of crypto currencies I struggled to understand. Now I am ready to observe, then participate in other similar projects. The headline rate of interest is currently 750% APY, but you need to understand “impermanent loss” to be able to perform a proper reward / risk assessment.

In addition, these (the game Heroes) are the only NFTs that I “understand” the utility of, having earned 18% on their value in the last 19 days.

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DeFi Kingdoms isn’t quite as well known as the likes of Decentraland just yet, but it has gained huge traction over the last month.

DeFi Kingdoms labels itself as a game, DEX, and a liquidity pool!

It lets you collect NFTs, level up, and use them for quests to earn its JEWEL token.

Because it leverages Uniswap via Harmony ONE, you can also do various tricks with JEWEL to provide liquidity and earn extra yield—as is standard practice in DeFi, but not so common in NFTs (yet).

JEWEL is up over 1,000% since launch, which gives the game a market cap of $1.4 billion.

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What’s been the total interest since Nov 19? :open_mouth:

Because of your experience, I took a look. Still making my way around the world. Very interesting indeed!

Until last night and the predictable correction, it had done a 2X.

I’m looking to have a go at Town Star myself. Think the play to earn concept is a bit of fun and might make me something.

An update and two records in one day. I have now accumulated 40 heroes, and I send them questing just about as often as I can. That is between two to three times a day. Last week I stopped recording the granular data and tried to limit my total time spent in this game to one hour per day. That is 30 minutes in the morning before I start work, 10 minutes at lunch time just to collect quest rewards and send others out on quests, and 20 minutes in the evening. I don’t always optimize rewards versus time, but I have got into a settled routine now.

For a long time I have been thinking of using my crypto portfolio as a regular income stream, and my 2022 crypto trading plan includes withdrawing 1% of portfolio value per month to Fiat and to identify which of our monthly costs this pays. In preparation for this, I have decided that the easiest way to start this is to convert all the game items to USDC on a weekly basis, and to get the USDC on an off-ramp back to our personal bank account.

Today has been really good to me. Firstly, This is the first trading day that I have been rewarded by more than one specific item in one trading day, and it is also the first time I have been rewarded with TWO of those items within the same quest series. The items are called SHVAS runes, worth around $10 each.

So today has yet to finish, and the snippet below is today’s income from items gained on quests, and a total since I began. Dividing today’s total by the all time total gives me a good estimate of how averages will work out in future. The more experienced these Heroes become, the more each of them earns every Quest.

My target is $50 per day, and today was a great Sunday to get these excessive rewards.

I will start the 1% withdrawal in the new tax year and in the meantime, it will be interesting to see whether just withdrawing funds from Heroes quests will be able to constitute that 1% by itself, or if I will need to sell some crypto holdings to make up the 1% per month. It is in my 2022 crypto business plan that “trading” will constitute about 20% of overall profits from crypto, More time will be required to determine the longer term returns from these NFT characters, and it may all just disappear to zero. But then again, returns from Hero income appear to be between 5% and 10% per month of the total dollar equivalent value invested in these Heroes.

I may be completely wrong, but since the game currency Jewel has tanked 70% since its peak early January, I think it more likely that Jewel will increase in value than to reduce in value. It competes on a daily basis with BTC in our portfolio as the token of most value overall. When it went well over 50% early January, it did cross my mind to junk some of it, but I just let it ride. The other side of this is that I have ONE tokens in a vault paired with Jewel and headline interest on that undertaking is 320% APY up from 280% APY last week.

Some really interesting stuff going on with ONE right now. It may completely tank, and so may Jewel, but for the time being it is useful to have two income streams from the same narrative (DeFi Kingdoms)

How is you DeFi Kingdoms investment going? Any updates? I heard rumblings of an exploit potentially hurting Jewel price.

Yes, the price of Jewel fell to $1.25 from about $8, and seems to have stabilized around the $2.00 mark. I attended two AMA meetings where the founders and the team explained the exploit that allowed “those in the know” to unlock their locked Jewel a lot faster than was designed, resulting in that panic fall in price. Whilst the price of Jewel is down more than 90% from its peak, our account value in DFK is down about 50%. Contrary to many players, I took a decision to INCREASE our stake in DFK, and the main reason for that is the income being generated by the Heroes. During this awful time for many, I had about half our total Jewel investment in Heroes (about 50 of them). When the Jewel went very volatile, I bought and sold more Heroes than I have done for the past four months, with an average uplift in value of just over 20%. I just bought my 108th Hero this morning, and have sold a total of 55 Heroes in total. That is one side of the investment / trading strategy. The other side is that I estimate the Hereos are now capable of generating an income from quests of up to 10% per week. That is very speculative, but the net effect of the plummeting price has been a rocketing of the income earning for each Hero. I will continue to trade and quest these Heroes throughout though I am undecided whether to leave the assets as Heroes, as Jewel, as locked Jewel in the DFK gardens, or to port some of the Jewel across to Crystalvale where my locked Jewel/xJewel pair in that garden has doubled in quantity, but lost 95% of its initial value. Since all that value was a airdrop from the activity in DFK, its a bit of a puzzle to decide what to do. So I stick to my original plan, and that is to value everything in terms of BTC.

In summary, we bought Jewel between $7 and $10, the gardens and quests have increased our Jewel holding by 4 times the original quantity we invested. At $1.25 per Jewel we were at 67% loss, and now at $2 / Jewel we are at a loss of around 50%. Focus is still on how fast we can increase the quantity of Jewel in our portfolio, and we still accept the ultimate risk of it tanking to zero. For such a fascinating and ground breaking DeFi game, I find that hard to believe, but accept that may be the ultimate outcome.

On the other hand, if Jewel ever did return to $22 or above, the “DFK asset” would be over $100K. I still think the reward/risk ratio is worth the time spent on the subject matter.

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Just checked the chart on this one. Man it’s been brutal. This month has been so so painful. I thought the pain would end with Wonderland. That spread over to Luna and now I’m wondering if Tether is also in jeopardy.

I think this is only possible because you know your investments, timings of your buys and sells, loss percentages, and current portfolio value. Good for you. And obviously you have done your own risk analysis. The markets, all around, have been brutal since November of last year, but with the ups come the downs. The last 6-9 months, for the uninitiated, has been a great (but bloody) lesson in that the crypto market giveth and it taketh away. Nothing is guaranteed. Take your profits. Survive for another trade.

It’s tough when you take a step back and think about where prices where just 6 months ago, and believing that the fundamentals for certain projects haven’t really changed that much. The broader market has changed for sure, and of course the continuing global events related to the pandemic, inflation, itnerest rates, Ukraine, China, Taiwan, supply change, etc… But back to the crypto market, it makes me wonder why the disconnect between steady fundamentals and price being so volatile. Characteristics of a young market I guess.

The pessimist in me keeps coming back to wondering if just a small amount of whales are pulling the strings and taking us along for a ride.

But then the optimist in me says that crypto is here to stay. Leave your emotions at the door. Take your profits and start back over. Rinse in repeat.

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