The Once Powerful Bunny
It was not too long ago that the Bunny yield optimizer was enjoying the sun, sitting on the mountain tops of almost $500. Today, BUNNY ranges between $13 and $20 depending on the mood of BTC. I remember checking prices one morning at approximately 4am, only to find BUNNY all the way down at $6. I considered buying some more at that point but I knew that something catastrophic had just happened and that there was a chance that the price could actually bleed out much further.
It did however later prove to be the bottom but I was not willing to take the chance and risk of further exposure before knowing exactly what had actually taken place. It turns out that BUNNY had suffered a flash loan exploit and that the price of BUNNY had subsequently suffered tremendous loss. When dealing with DeFi tokens, you have to be extremely careful, as this is not like buying BTC. In the case of BTC, you know that it is just a matter of time before the price corrects. Some DeFi projects on the other hand, collapse never to perform again.
Fortunately for Bunny there is hope! The TVL is currently at almost $700 million at the time of writing, indicating that there is still a significant amount of trust from the market, despite the recent incident.
The compensation pool, which was introduced by the team to help compensate for losses incurred, also seems to be a very helpful gesture. This has been very well received by the users affected by the recent exploit, encouraging them to remain with Bunny. Whatever BUNNY balance was held by BUNNY stakers at the time of the exploit, would in turn be matched with an equal amount of pBUNNY. This pBUNNY was then staked into a new compensation pool, which pays out daily amounts of BUNNY, CAKE and BNB!
This compensation pool has been set with a lifetime of 90 days, in order to help users recoup losses incurred by the exploit. So in all fairness, the situation was handled fairly well by the team and after the 90 days has expired, users should have amounted a significant amount of Crypto. Prices will most likely also be significantly higher at the end of the allotted time.
Buying More
Once the storm had settled, BUNNY seemed to find a fairly reliable trading range, which encouraged me to double down on my BUNNY holdings. My motivation now being somewhat different to above. Obviously, purchasing BUNNY after the exploit will not entitle you to receive pBUNNY and be able to earn from the compensation pool, as well as the standard BUNNY pool. What is rather cool about the BUNNY pool though is that the rewards are not paid out in BUNNY, or CAKE for that matter.
Rewards are paid out in WBNB, making it a nice alternative, especially since BNB is probably one of the most stable altcoins around. Passively earning BNB is rather an attractive opportunity to me, which can pay great dividends down the line, despite what the price of BUNNY does.
Apart from this, there is the chance that the price of BUNNY will rebound quite strongly with the rest of the market, in the event that BTC shakes off the dust and gets moving! It is also important to note that other optimizers are also taking a hammering in regards tp price and TVL. Projects that have not suffered an exploit but are merely reflecting the effects of a bearish trend. Optimizers such as Autofarm and Beefi have not managed to avoid damage in the recent carnage, creating a clear picture that Bunny is actually fairing quite well, all things considered.
Utilizing BNB earnings to further compound in other vaults is also a strategy that can accelerate growth and make this investment all the more sweeter. DeFi will unfortunately always contain some element of risk, even if it is somewhat tamed over time, it will always be here. For some, this is not an option and simply hodling is the only approach they feel safe executing. For others, the potential risk is worth the reward. I utilize as many strategies and risk profiles as possible. The higher the risk, the smaller the investment. It makes sense that if an opportunity offers tremendous upside potential, rather invest modest amounts, as not much is required to experience a significant gain.
Structuring risk and allocations is very important in securing victory in the Crypto markets. However, we will save that for another one, cheers!
