Why the Dracula Protocol truly sucks

By Moma | Long term defi | 4 May 2021


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The Dracula Protocol offers "One tool to Farm them all" with a platform that allows for automated, streamlined "meta" yield harvesting for many "victim" platforms such as Uniswap, Sushiswap, Pickle, Lua, Dodo and more coming. 

How it works for Users:

  • Users deposit LP tokens from "Victim" platforms
  • Protocol harvests rewards daily, ie "drain"
    • this socializes gas costs and automates the reward collecting
  • Protocol trades these rewards for ETH
  • ETH enjoys %APY% until Users claim their rewards
  • Users can claim in ETH or $DRC token which is bought on open market (ie buy pressure)

Users thus can set it and forget it (LP tokens) and let their ETH rewards compound.

Meanwhile, for $DRC holders and stakers on the platform, DRC offers 3.75% cash flow of the total APY of TVL from Victims. Consider the following:

  • TVL of Victim protocols > $5b
  • Dracula Protocol captures  4% of this: 4% of $5b = $200m
  • Ie $200m in TVL on Dracula Protocol with yield of 15% apy
  • $200m in TVL at 15% apy = $30m 
  • $30m at 3.75% = $1.125m cash flow to DRC stakers 
  • Assume # DRC staked = 10m (recall <15m supply)
  • A bag of 10k DRC (currently $10k) is .01% of the staking pool ie 10k/10m = .01%
  • .01% of $1.125m = $1125 in cash flow.
  • ie $1125 on $10k = 10%+ passive yield

Note this yield doesn't factor in any appreciation of the underlying staked DRC token. DRC sits at a 10m fully diluted market cap. The protocol saw some curious price action over the past few weeks with a big selling the news effect plummeting the price == great time to consider a position.

Per the example above, with $200m in TVL and a mature Mkt cap:TVL ratio of 0.5, the market cap of DRC would be $400m, a 40x from the current price.

As the Dracula Protocol attracts TVL, it will truly start to suck Defi:

Visit https://v2.dracula.sucks/ to read more

Join https://t.me/DraculaProtocol to chat with the community & ask any questions 

Check https://duneanalytics.com/sirbundyman/Dracula-Protocol for hodler and staker statistics

                                           

 

 

 

 

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Moma
Moma

In mathematics we trust


Long term defi
Long term defi

Analysis on crypto projects with asymmetric upside. Based on tokenomics, value proposition and user experience.

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