Hot Garbage Coin Corner #3 (the end)
Welcome to a likely short lived series on the garbage coins to be found on Raydium Ecosystem Farms and my interactions with them.
I'll update on my degeneracy across the wilds of Raydium Farms and exactly how much money I've lost so far.
Intro to the wilds of Raydium Farms
Raydium is a defi protocol that acts as both DEX and a liquidity provider on Solana. To find out more about it, check out @Saitama 's article on BULB https://www.bulbapp.io/p/3f481c14-65dc-4531-a879-c0b4f53442fa/introducing-raydium-igniting-the-future-of-decentralized-finaqnce
What stands out about Raydium is the ability for anyone to set up Pools/Farms. This has led to a very long tail of absolute garbage tokens.
They are nearly always unlisted (e.g., they haven't been listed on DEXs, including Raydium) and often able to have thousands to millions of tokens purchased for well under $1.
I find them a very cheap and very good way to learn about the ways in which you can lose money in defi.
Find them at https://raydium.io/farms/?tab=Ecosystem
WARNING: You WILL lose money playing around with these. Don't put in more than $5 total. That's across all tokens, not per token. Consider it a very cheap lesson.
If you're a bit of a degen then it is a lot of fun too.
This week's trek through worthless tokens and unsustainable yields
We'll look at what has happened since we last checked in and what new degeneracy we're going to embark on this week.
As a rule we'll look at the last 7 days unless otherwise flagged.
The worthless past
How much did we lose? Well.. not a bad week or so considering the premise of this blog series.
LTX-SOL
This project just keeps steadily chugging along. Transaction volume and TVL remains good, though most of the yield is still incentivised.
Incentives still have a week or so to run, it'll be interesting to see what happens when they run out.
Dex Screener https://dexscreener.com/solana/cua6yvcia2czjfetli9nwjeohx8xfykuglnqiczhuegq is telling us that we're seeing a drop in price over time, but again, it's also on the back of decent volume (for a small pair like this) so that means we're still seeing okay transaction fees.
All in all it's been a reasonable investment. A surprise given how I ended up in this LP to begin with. In a couple of weeks we're 26.55% on our token position and 45.74% on our dollar position.
Now it's still very low liquidity, but given this is a non defi-only product then it's not that too bad. Think of this as you would a start up: It's risky but there is a real business here they're trying to build.
SEA-USDC
This is how bad this dump is: There is no LP liquidity left. Just what's in the farm. Rewards are still going for another few days though. And check that APR!
Sure we're poor as, but we're stacking that imaginary cash like nobody's business!
Just LOOK at these numbers from Dex Screener https://dexscreener.com/solana/5yy3u6rfgtoqq6uug65netaoabhgmt8xfej9xqqyir9w.
Kids: We were part of the exit liquidity.
I'm not giving any $SEA away. I'm keeping it. I want to see what happens next. I just feel like there's going to be something else that happens here. And it's probably bad, but I just want to see how this could get worse.
For now here's where we are:
- 64.09% up on the LP token
- -99.00% down on the dollar value. Woof.
The only way is up. Right?
DO NOT join me in this journey. Just don't. I'm not doing this for financial gain (clearly).
ETX-USDC
Another success story. It's like I didn't read the title of the article.
Volume is great, most of the APR is actually fees, and the rewards are adding a great boost.
Dex Screener is showing a steadily improving price and a consistent volume https://dexscreener.com/solana/8axhnx31dnshhbhdu53zjus54vpvhr9eurbmx8pml9dl
And there's decent liquidity here.
A potential low cap gem. We're up 9.75% in terms of the LP token and 31% in dollar value.
Now it's risky as it's still very low liquidity in an overall sense and very low liquidity for a DEX. But, you never know... tough time to start a new DEX though.
2jw1uF-USDC (VIVAION-USDC)
We're looking okay on this one. Yield is still almost entirely incentivised and one of those incentives, the pool token, runs out soon.
The other reward AEVUM, a token that is part of the game product Vivaion represents, is also a trading pair on Raydium with a farm.
It's decent yields and a dual reward with USDC.
Though, again, most of the yield is incentivised, so it likely won't last without increases in volume.
Dex Screener https://dexscreener.com/solana/r3nwcur94zs1qqnv2smsss9gqqbd67nujwfxe77msou shows us this thing is stalling out.
Now this is another non defi-only product. In this case it's a game. Web3 gaming is kinda the wild west right now. It's pretty small but with a large potential to grow. A game doesn't necessarily need a heap of liquidity as defi won't be a core function (at least we assume). So maybe a very low liquidity like this has isn't as bad as it would be for a finance product.
It's still super risky. Games, by their nature, are risky projects regardless of size and this one is the worst of a few worlds: It's a game, it's in web3/crypto, and it's small.
The end of this journey. Sort of.
Normally in this section we line up our new dumpster dives but this post will be the last post I do in this series. I warned you at the start this would likely be short lived and so it has turned out to be.
I think we've learned all we can via losing money to terribly obvious pump and dump schemes in Raydium Ecosystem farms.
However something I didn't expect has happened: I have found a couple of low cap investments I'm going to keep.
I've actually come around to the value of having, in my portfolio, a small amount of highly speculative plays. It's like a seed fund investor in the traditional VC world would think: Let's invest in 30-40 of these things and we'll look for 1 of them to 100x.
Here's what my list of wild bets looks like at present.
Be safe out there degen
It should go without saying that you should only be ever putting a small percentage of your total portfolio towards these types of investments.
Anything over 5% is too much IMO and I think a safer range is 1-3%.
You should only go after these if you are prepared to do a bit of research. Just looking at an APR/APY and the last 7 days of price + volume isn't enough.
You need to be able to find the project and find the LP on something like Dex Screener or CoinMarketCap.
Having the token/s listed on a coin explorer (e.g., CoinMarketCap, Coin Gecko etc..) is also a very good sign, though not a deal breaker for early stage projects (though you'd want them to have plans to get their token listed).
This is definitely a fun part of investing in crypto. It's right in the wilds of new projects and that's exciting.
The failure rate will be very high but that doesn't mean projects will fail straight away. Remember to always take profits for any reasonable gains you see. Whilst it might be tempting to think something that spikes is the next $PEPE and all you need to do is hold on for the big payday, remember this: Most $PEPE holders are down bad (they were the exit liquidity for the whales) and very few $PEPE like rises ever happen.
What's more likely is a token from something like a web3 game will be a rising star for a bit and then it'll drop away as whatever drove that short term interest moves onto something else taking that influx of players with it.
If you haven't taken profits during that time you'll be likely worse off than when you started.
