Rabbit Finance and why I don't trust it
Here is a little Rabbit update about a week later. It looks like I wrote the original article at the absolute peak of the Rabbit Finance price. It was bout 53 cents at the time. It tanked the next couple of days and it is now around 40 cents so at least for now I was right to stay away. It doesn't appear to be yielding 800% which just proves that yields are bullshit if their tokenomics don't allow it to continue as more people contribute. They get you in with a high yield number and as soon as 100k is in the pool the yield drops way below Cake.
One of the main ways I learn about new tokens is by watching the Syrup pools on Pancake Swap. Today was no different. I noticed there is a new coin called Rabbit and Carrot. There is a pool that you can stake Cake and earn up to 300 APR. There is a catch. The most you can stake is 100 Cake. Usually that is for the first two days. The big money knows it isn't worth the time and energy to enter these pools. The APR stays high while the 100 limit is in place but as soon as the limit goes away, the rate will drop as people pour in.
Usually the yields settle right around the yield for Cake. Cake is right now about 75% APR and the syrup pools are in the 80 percent range.
Now, I looked further into Rabbit Finance and if you stake their native token you can earn 800%APR and the token is going up right now. It could be a great time to buy. The problem is that if you need to sell there is no liquidity. There is only 1.8 million dollars of liquidity in the Rabbit Finance pool. If that runs out, you can try Dodo but they probably have less. You could try Mdex and again who knows. The bottom line is that you might get left holding the bag.
When it comes to Cake, you have lots of places to try and liquidate. If pancake swap is broken, almost every Defi protocol on Binance Chain takes Cake. If you aren't able to use Binance, you should be able to send it to one of 100 centralized exchanges that support Cake. The price may collapse if there is a bank run but you need to chose your protocol and hope you are right. For the time being I like Cake and I think everything else is too risky.
There are better yields on JetSwap and using Autofarm but I don't trust Jetswap and Wings in the least and I haven't evaluated Autofarm enough to see what it would benefit me compared to Autocake.
Autocake is the cleanest shirt in the dirty laundry. Its not perfect but if you believe in CZ and his desire to make money and make Binance great, than you should be able to believe in Cake too. The largest AMM failing on Binance Chain would ruin the chain. People would immediately start leaving for Polygon and Heco. There are no competitors coming online too with Kuchain and Gatechain. I have a feeling Hitchain is going to be coming too.
All of the Centralized Exchanges are going to create their own coins and have their own pairs so they can make more fees. They will use their coin to start a decentralized exchange like Binance because Binance has the best business model.
If I was to copy any company in the world right now it would be Binance. All you have to do is set pretty and watch your BNB fortune go up up and away.
I have been watching it today and it is up about 100%. Someone is going to make money today but I don't want to take the risk. I have had trouble even with coins I got from Syrup pools. I was yielding tBTC or Tau BTC and made about $50 worth. It took me 2 weeks to figure out how to swap them because I kept getting an error. There was no on to ask for help and I couldn't figure it out quickly. I was able to eventually get rid of them by changing a few parameters and doing a lower amount 3 times. I got most of my $50 back but not all.
It definitely wasn't worth the extra 5% over Cake to get stuck with some tau BTC. I have been doing Defi for many months now and that is like 20 years in Defi time. Safe yourself a lot of heartache and stake Cake. You can't make enough money to justify the fees and the time spent with any other protocol if you are playing with large sums.
If you have a million dollars or more and you put it in any Syrup pool other than Cake, the yield will instantly drop and you won't be liquid. You can do a million in Cake and the yield will just go down a tiny bit. With Cake you have billions behind you and Binance behind you. Ain't nothing better than some Cake Stake.
If one was to have made good money on Rabbit Finance they would to have needed to buy it yesterday before it popped. Let's go check Pancakeswap Medium and see when we would have known that Rabbit was going to be on PCW.
It's a few days later from when I typed the article and I took a look at Rabbit. Somehow they have 300 million in Total Value Locked. They have millions of dollars of stable coin deposits. I just don't get why someone who holds a stable coin would take the risk of depositing it with Rabbit when you can get interest on Stable coins using many different much more established protocols on Ethereum and on Binance Smart Chain.
I understand taking a risk for a better yield but I don't understand who is risk averse enough to hold a token pegged to the dollar but takes a risk to use an unproven protocol. If I had 60 million in BUSD I would not be storing it on Rabbit. This risk is too great of loss for the small amount of interest. If you are going to take a risk, I think it would make more sense to buy a unstable token with a much higher yield.