Do you want to be right, or do you want to make money? Take the time to thank Charles Ponzi before you go to bed tonight. Should he accept your prayer, you may be gifted with the wisdom of how to profiteer the next crypto ponzi you see.
I have paid my tithes, and have been given permission to relay to you my insights on the subject.
Forget the Downline
First of all, YOU'RE CHEATING!
Having a downline is like ponzing on easy mode and doesn't require any further insight. If you go in with a downline, you can win.
I've actually never made money on a downline, because I just don't enjoy or trust people enough to try to make one. Fortunately, there are other ways to master the ponzi.
Recognizing a Ponzi
First of all, everything's a ponzi.
Humans do not have the psychological capability to create perpetuity. Every system created by humans will fail eventually. The secret is knowing the pattern that every system creates regardless of sustainability. That system is pump, dump and slide. Your job is to recognize which phase the system is in and act accordingly.
Go Big or Go Home
You must enter the pump stage before it begins to dump, of course. You must go in with capital sufficient to quickly remove your initial investment while still keeping enough in to yield farm with house money. This means a big initial investment and a fast move out once you ROI.
Most people wait on a 2X before they pull out their initial capital. If you catch a pump early enough, you might be able to reduce this factor to a 30% or 40% gain.
My game is catching the first pump. If there is any other move other than straight up, I pull out immediately and forget about it. On to the next. I want to be in on the first 2 hours of a coin reaching Dextools. If I'm late, then I analyze the play using other strategies to determine if I'm in or not. If you wait, however, you will have to wait out the entire pump and dump before going in. There's nothing worse than buying on the dark side of the mountain. Give it some time to find a bottom and make a valley.
If I only get 20% out of the pump, I take it and move on. Forget yield farming with anything less than $1000, especially on Ethereum. It's not worth it.
Split the Stack
My initial investment is sitting safely in my Metamask, and I have excess capital I pulled from the pump. This excess capital is at least $1000 if I'm on Ethereum network and at least $250 on any other.
I don't put any extra money into a ponzi play when I yield farm. I split the stack.
Splitting the stack refers to exchanging the coin you won into the other coin required for yield farming. This is a hassle on Ethereum; the fees are discouraging. That's why I never farm with less than $1000. I subtract fees from my capital when splitting the stack (including the ones I will incur pulling out of the farm), so there's usually only like $475 on each side for a total of $950 or so.
When I put the money into the farm, I write it off completely. It is no longer a part of my net worth. I am looking to it strictly for the daily rewards, and bonus if it doesn't rugpull and I get some capital back.
I never compound back into new farms. I am constantly taking rewards and switching them into safer coins. Once the value I have extracted matches the value of the farm, I may consider compounding. Not before. This ensures you expand your crypto ecosystem even if the farm rugs you. Nowadays you can usually get a few good days of farming before a rug, even if the devs plan to rug. Plus it's house money anyway, so I don't care. Good on you for being a scumbag. Sacrifice your rewards to your unheavenly father.
If the farm doesn't rug, the ponzi is on. Projects with no established use case are ponzis, because they are invoking sell pressure as they distribute their coins through the farm. The rewards you receive through the farm will NEVER outweigh this sell pressure. This is why I never keep the coins at first — I'm basically trying to outpace that inflation with gains from NEW projects, not the current one.
Take It Back
Of course I'm always looking for signs of a huge dump or that the ponzi's over and people are moving on. The problem with organic rugpulls (that's what I call users leaving en masse) is that they happen FAST. That's where you get the Bart Simpson chart pattern that is so unique to crypto. You have to anticipate them, because you can't react.
Especially on ETH. When the organic rug happens, fees for that trade skyrocket, slippage goes up and you face a higher percentage of failed transactions. Don't wait. If you can't take the heat, get out of the kitchen and don't look back. Sell that shitcoin and move on. Good thing I kept the fee money for the unwinding when I first split my stack.
If I'm out, it's on to the next. I may put the project on my radar for future investment, but not likely. If I got in with a ponzi mindset, odds are the project is trash anyway.
The Slide
If I stay in past this, it's because the project has a bit of sustainability and may move sideways or pump a bit. A good example of this is Pancakeswap. I believe that project has legs because it is running away as the number 1 DEX on BSC. So I stay in the farm.
Now I'm beginning to get back the value I've put in the farm, so my average cost on the shitcoin is falling. I can take a small dump here or there. If I am in the stage of riding the slide, I don't take out my money from the farm for any reason. I've decided to ride it out over time, and I'll probably see pumps and dumps over that time. Timing them is difficult, especially when there are other projects to research.
These farms serve as my own personal faucets for investing in new projects. I have now fully written off the value of the coins in the farm. That's why I never invested in CORE. I don't need someone else to tell me to lock my liquidity. Have some discipline!
I've seen the best slides pay off for years. I'll let you know when I've been in one long enough to personally experience it. I have two now that I believe in, Pancakeswap on BSC and Bnkr on Tron. Yes, Tron. Bnkr is like the only decent dapp on the network, but it's very good.
