Update on my two most "degen" crypto investments

After my birthday in April I got the urge to get more degen. In mid-April I wrote and article titled I've Become a DeFi Degenerate and the journey began. I was pretty worried about the rabbit hole that I was going into, but after getting involved with two projects I decided that was enough for awhile and I was likely to lose about all of the nearly $1,000 I put into it. It wasn't enough to hurt me financially as I adhered to the "only invest what you are prepared to lose" caveat.

But did I lose on these investments?

While it is still early to tell on one of them, on the other I was nearly certain I would never recoup my full investment and still might not. I decided to invest in two different types of projects. The first was "miner" project that involves investing capital and hoping enough new capital comes into to recoup your investment and maybe make some one. The second was a "rebase" token in which you invest in a token, place that token in your wallet that compounds (or rebases) rapidly and hope that the rebase offsets the declining price.

Baked Beans (BNB Miner)

The first project is called Baked Beans and it is of the "miner" variety. I wrote about this project in an article called Eat Your Baked Beans and Earn up to 8% Daily. The key phrase there is "up to" because getting 8% back daily isn't very likely. When I entered the project the amount of capital flowing into the project was growing by leaps and bounds everyday. I had looked at the project before and decided to hold off which was a mistake. The key is to get into a project like this early as the return is based upon how often you compound (they recommending a 6:1 ratio) and how much the contract is worth (inflows versus outflows).

The first week or two was great with the contract growing, the community strong and I followed the 6:1 strategy. But a bit after a week into the project the contract balance started to decline which meant more money was being pulled out then going in. This is a bad sign. I stuck with the 6:1 ratio for the second week but claimed less than the first week. With alarm bells going off, it was time to rethink my strategy.

I had invested one BNB into Baked Beans and after the 3% tax I had .97 BNB worth of "beans" to start with. They give you millions of beans but you have to compound to keep up with the rest of the users to get a decent return. After pulling out .104 BNB after the first week, my second week was down to .97. I could then see even with compounding my return dwindling fast and three days later it was own to .075. Forget compounding, I had to get back my investment as quickly as possible.

I certainly wasn't alone in my thinking and the balance nose dived resulting in rapidly diminishing returns. At this point I hoped to get half a BNB coin back and take it from there. The more I withdrew each day, the smaller the rewards until a days worth wasn't even worth the gas fees to take them out. I decided to let the rewards build up over multiple days before withdrawing them. 

Fast forward a few months and something strange is happening. I will see zero rewards for days on end and all of a sudden there is a decent amount to pull back out and I do so quickly. At this point I withdrawn a total of .888 BNB or nearly 90% of my initial investment. As my withdrawals have slowed, so have everyone else's which makes the balance drain much more slowly towards the end. 

I will likely recover my initial investment which makes it well worth the cost of the "free" education, this is mostly the result of getting in just early enough. Bottom line, I'm not a fan of so called "miners" which are certainly very much like a ponzi based on how they work. Many more copy cats of Baked Beans have appeared over the months given the success of the project but I haven't taken a bite and am not likely to.

Safuu (Rebase Token)

The second project is called Safuu (Sustainable Asset Fund for Universal Users) and it is a rebase token much like Titano and Libero. I detailed this investment in an article titled DeFi Degen Investment SAFUU - the Good, the Bad and the Ugly. This project has also been an emotional roller coaster ride, but pretty much in the opposite direction to Baked Beans.

After buying 2.4533 Safuu tokens for $560 back on April 9th I had no idea what to expect. What I saw was the price fall from where I purchased at of $173.57 drop to below $150 after initially pumped to around $220. Then it fell below $100, then $50 and eventually saw the price below $10. What a stupid move I had made and at this point it wasn't even worth selling anymore so I decided to just sit back, count my losses and ride this thing out to zero.

It is nice seeing you tokens grow and in the case of Safuu the annual return was set at 383,025.80% with rebasing every 15 minutes in your wallet. Every 31 days your number of tokens would double so after a month I had about 5 Safuu, although they weren't worth a whole lot. Two months in I had 10 tokens and after all this time I'm just about at 47.

As for the price, it hit a floor a little below $10 in June and has jumped around but still is around that price two months later as the team has announced a new token, their own blockchain and plenty of other news. Despite a little pullback, I'm now down about $50 and will still let it ride to see this thing out. There will be a "sacrifice" in October for "SafuuX" which will reside on the blockchain and be valued at $6 each. I will have 140 Safuu at that point and if the price can stay around $10 that would translate into 233 SafuuX tokens. That said, the price of Safuu swings wildly so who knows by that point.

This project has been fun to follow do to the numerous "fan boy" YouTube channels and a charismatic leader Brian Legend. He is a failed business man on numerous occasions and quite outspoken, but he has a flair for the dramatics and thinks big. Safuu has become a major sponsor of a British Touring Car Championship racing team and announced they will launch Safuu Airlines. On the marketing front, they have put up QR code advertisements all over the London Underground subway system and are the main sponsor of the upcoming Crypto Expo! conference in Dubai with Brian Legend as a keynote speaker.

So what is next?

I like to have about 10-15% of my DeFi portfolio in projects that don't relate to Bitcoin, Ethereum or USD Coin and that includes a small portion dedicated to these kind of degen projects. Since I'm actually up on my first two, I've decided to give a few more a shot including a small investment in another rebase coin called Liquid Capital that I got into during the presale phase and I wrote about it in a previous article. I actually study degen projects a lot and only invest in a very small percentage that I look at. My hope is to strike it rich off of one of these but my expectations are to take a big loss and possibly lose everything. 

The goal is really to continue my crypto and DeFi education and hopefully get an unofficial degree in DeFi Degen along the way. The better I understand these type of projects, the better I understand the crypto world overall - and that is where the true value lies.

Do what is the most "degen" crypto project you got involved with?