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BtsDoom

Following the white rabbit down the rabbit hole that is the DEX - Farmers Only Exchange

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I have been trying to learn about leveraged liquidity pairs for the past few weeks. For history, see Yearn, Olympus (OHM), Wonderland (TIME) and other forks of OHM. It took me a while to get my head around these exchanges until I was on my third whitepaper.

It dawned on me around Christmas or New Year about the creation of these phenomena, which bend our perception of the real world like the Matrix trilogy, and hence my reference to the white rabbit. The use of the word “treasury” was the key to me, and my realisation more than a decade ago that sovereign nations have been doing this since the creation of nations. They just print currency out of thin air and use a treasury function, along with interest rate policy, to manipulate (try to control) supply and demand to stabilize an economy. In the recent few years it has become apparent to most citizens of most countries that the record deficits of the last two years will not end well for fiat currencies.

So I wished to take a very small position (a pilot position) in a leveraged holding of a currency pair. And this week saw the launch of the FOX (Farmers Only Xchange).

It is run on the Harmony (ONE) ecosystem, which has become my favourite “network” - if that is the right word for an ecosystem that promotes dapps (Decentralized Applications) within its own currency (in this case the ONE).

This is the third investment I have taken in this ecosystem, the first two being DeFi Kingdoms with its own currency the Jewel, and Tranquillity City with its recently released token the LUMEN. Both these dapps are games in which NFTs can be used to generate an income. So they fit my definition of investible NFTs.

There is a very special reason I have chosen to dip my toes into leveraged currency pairs, and that is the future. I am not going to reveal what that special reason is because I haven’t yet made my own move in that area, and don’t want it to be necessarily more expensive when I have free funds to do so in about six weeks time.

So the experience was not an easy one. I started three days ago amidst an almost total shutdown of the ONE ecosystem. There were issues preceding the last few days of latency and many transactions needing to be repeated but that was thought to be due to the uptake of DFK - membership has grown from 25K to 70K in the time I have been playing the game. It turns out that there was another issue of spam congesting the system, due to the ridiculously small transaction fees that attracted me to the network in the first place. I have now made nearly 1,000 transactions on the Harmony network and have spent far below $10 in all on transaction fees.

I have lodged my pilot currency pair in the FOX-ONE vault at a daily interest rate of 0.81%, equating to an annual APY of 1,785%. This is money I am prepared to lose, but my gut feeling is that I will not suffer an overall loss at all, with a good chance of doubling funds in the next few months.

If there is any interest in this “rabbit hole”, I will try to answer questions on this thread. Meantime, I will be keeping a close eye on how this vault performs. It would not surprise me to see the TVL (total value locked) to grow very rapidly. I want Harmony to succeed with its two second blockchain cycle and its extremely low fees. Like many others of a similar ilk, the world is not going to wait till ETH sorts out its gas fee issue. None of them has a guarantee they will be first mover in the cost versus traffic stakes, but a two second block time is a good start.

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Is there any movement in the APY in the last week? Harmony ONE is receiving increased media coverage, bringing in at least more eyeballs.

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The APY is shown below. It doesn't change much. However, the temporary loss deteriorated quickly.


Since the proof of concept LP, interest has been 83.16/78.17 = 6.3 percent since 16Jan22 (9 days), but the USD equivalent of the FOX-ONE pair was about $234 on 16Jan and is now $127 - a loss of 48 percent. It's a good thing it started like this. I'll take my time deciding whether this or other LP offerings are worthwhile.

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LOL, so I looked it up, and it appears that I need to wrap up my current MEMO (changes coming soon, mergers etc which will render MEMO useless or something).


Anyway, as with all of my experiments, I invested $100 in this (i.e., I purchased $100 worth of AVAX). When I first started, on December 4th, I had 0.014 MEMO. It is currently 0.037. But, with everything currently tanking, if I wrap what I have:

My $100 is now worth $15. HAHA. This is fantastic!

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