2.5 months have passed since the start of the “Making money on crypto. Test-drive” reality show. Unpleasant surprises from HeroCat.io, a drop in investment value, and an estimate of impermanent losses of December 10, 2021.
The calculations exclude exchange fees and slippages, so the final profit may vary slightly.
The Cat Continues to Unpleasantly Surprise Us
Our recent investment in NFT farming on the centralized HeroCat.io platform continues to meet every possible negative outlook.
In the previous article, we talked about such a technique of rewards calculation as halving, consisting of their significant decrease. The main problem was that the platform does not inform the participants about the order or the amount of rewards reduction for NFT farming.
As of December 10, 2021, the NFT cat with a hash rate of 1500 brings in about 1.6 HCT per hour or about $0.32. The drop in rewards is slightly faster than the increase in the overall hash rate.
However, the trouble did not end there. When trying to withdraw the previously earned 161 USDT, the tokens did not appear on the wallet, even though there is information in the account about the successful withdrawal.
By contacting the project support chat on Telegram with a request to solve the problem with the withdrawal in response we received an even stranger offer: to follow the link, which asked to enter the seed phrase from the BSC withdrawal wallet!
In response to a comment about the unacceptability of such actions in terms of basic information security rules, the chat administrators just said: “do not worry, this is the official chat of the project, you have to trust us and there are no other ways to return funds”.
Of course, we did not take this step and do not advise anyone to do so, because this is the most common method, which allows attackers to steal all your funds in the future. And here it does not matter at all whether the attackers are the support chat staff, or it is an incorrect implementation of the D’app itself.
After a few days, we managed to successfully withdraw 248 HCT, which were sold on Pancake Swap at the rate of $0.19.
So, out of $1,200 invested, we managed to return a little less than $360 at the moment. Another $19 is on the account as HCT tokens and one transfer for $161 is irretrievably lost. Taking into account the dynamics of rewards, it is unlikely that we will return more than 40% of the total amount invested.
WTON-WETH on TON Swap
As a reminder, the Free TON blockchain was renamed EVERSCALE back in November, and the native TON Crystal blockchain token is now called EVER. Many blockchain services are in the process of rebranding and are still using the old names.
Farming the WTON-WETH pair on the TON Swap platform for two and a half months yielded just over 135 WTON ($35). The valuation of invested assets continues to decrease and is about $205. We continue to monitor the change in the ratio of tokens in the liquidity pool related to changes in their rates. Impermanent losses are currently about 3%.
According to the 120-day vesting period, only 40 WTON are currently available for withdrawal.
The total amount invested, including rewards, is $241.
Cake on Pancake Swap
We have lost even more from the initial investment in auto CAKE on the Pancake Swap. Even the reward from the investment, which is 1,148 CAKE and continues to fade away, cannot fix this unfortunate situation.
For 2 months the profit from farming was 1,024 CAKE (∼ $13), which is automatically added to the amount of the initial investment. Currently, the total amount of the deposit is about $130.
SYP-SOL on Tulip
The tendency of SYP-SOL pair on the Solana Tulip.Garden blockchain farming platform remains negative. SOL started to drop in value following SYP. The total amount invested in farming dropped to $148, despite the accrued reward of nearly $22 LP tokens.
Impermanent losses are 5.6% and still do not have a significant impact compared to the value of the assets themselves.
Results of the Week
Investing in the Hero Cat platform allowed us to demonstrate all the risks of such risky investments, although it will cost us more than half of the investments.
In addition to the traditional risks associated with non-transparent farming terms, we see the main risks of centralized crypto platforms: the impossibility of withdrawing funds.
An unpleasant surprise for us was an attempt to lure the seed phrase from the support service. All the behavior of the platform in the aggregate reduces the probability of a favorable outcome to almost zero. We hope the experience we share with you will be useful for you and will help to avoid unnecessary expenses in the future.
The decentralized platforms Tulip Garden, TON Swap, and Pancake Swap work reliably and regularly accrue rewards. At the same time, the general situation in the cryptocurrency market — the value of almost all altcoins and bitcoin dropped quite significantly (up to 30%) reduced the value of investments.
TON Swap is the only platform, in which the investment is still positive.
To date, the wallet has $295, of which $70 was brought by NEAR-USDT farming on Ref Finance and $225 by ZOO-BUSD on ZOO Game.
What will the next week bring us?