Unboxing Cryptocurrencies — DRIP Token

jaycesondon
8 min readDec 10, 2021

A recent trend in the crypto market is the rise of passive income projects. There is a proliferation of these on the market now. From staking and lending protocols like CakeDefi to bonding protocol Olympus and its many forks, there is no shortage of passive income projects. Sustainability of most of these projects is questionable at best, but there are good prospects. One of these in my opinion is DRIP, which has had tremendous growth since launching in April of this year.

So, what is DRIP? DRIP is a smart contract that promises to pay 1% a day on your deposits up to a maximum of 365%, or 100,000 DRIPs. Once you reach the maximum DRIPs you cannot claim anymore. However, you can have more than one DRIP account, so your earnings are not restricted. To get to that 100,000 DRIPs faster, you can compound (hydrate in DRIP lingo) your earnings, multiplying the 365% exponentially.

Buddy and Referral System

To join DRIP, you will need a buddy. A buddy is a person who already holds DRIP in their wallet. Once you join as another person’s buddy, you become a member of that person’s team. You can then build your own team by referring other and having them join using your buddy address. You earn rewards when your team members make DRIP deposits, including when they compound their earnings. For each person who joins your team, you get 10% of the amount they deposit. This 10% is paid by the contract and is not taken from the person’s deposit.

You also get bonus rewards from persons referred by your referrals (indirect referrals). To claim rewards from indirect referrals you must hold another token called BR34P in your wallet. The amount of BR34P you hold determines how far down you can receive bonuses (maximum 15 levels deep). If you have five or more direct referrals on your team you get an additional 2.5% when you make deposits. Rewards can help to grow your DRIP holdings and max payout over time.

One question that often comes up is whether DRIP is a pyramid scheme. How does the project pay 1% a day and sustains itself? DRIP is not a pyramid scheme because it does not rely on other investors money to pay earlier investors. The 1% is paid by means of taxes on transactions and minting of DRIP tokens if necessary. Every transaction (except buys) done on the DRIP platform incurs a tax. Taxes are used to pay dividends and rewards to stakers, but also means you collect less than 1% whenever you claim. If taxes are not enough to pay dividends, the smart contract mints new DRIP to pay them, though this is unlikely to happen. The contract will always be able to pay dividends, whether or not new members join. If you do not want to refer others, you just buy and deposit DRIP and collect the 1% daily. Of course, referring others makes your balance grows faster, but it is not necessary.

Airdrops

You can airdrop DRIP tokens to others. This is a great way to incentivize others to join your team. As your balance grows from referral rewards you can give back some of this to your team members.

Compound Your Way to Profits

You can compound your DRIP dividends by redepositing them instead of claiming. You can do this as often as you wish. Compounding incurs a 5% fee as opposed to the 10% fee for other transactions. Compounding helps to grow your DRIP balance and your max payout.

Getting Started With DRIP

DRIP is a smart contract on Binance Smart Chain (BSC). You will therefore need a wallet that allows you access to BSC. Metamask is one of the more popular wallets you can use and is the one I use. However, there are numerous other wallets. You can go to the Metamask website to download and install it.

Once you have Metamask set up, you can add BSC network by the following the link. You will need to get some Binance Coin (BNB) on BSC to purchase DRIP. For US residents Binance.us is a good place to get some BNB. For non-US residents there are numerous exchanges you can use to by BNB, including the international version of Binance. Once you buy some BNB you can send it to your BSC address on Metamask.

Purchasing and Staking DRIP

Now that you have BNB on Metamask, it is time to purchase DRIP. First you go to the DRIP website and connect your wallet by clicking the Connect Wallet link in the top right corner of the home page. Click on Metamask on the pop-up and enter your Metamask password if requested.

The best way to buy DRIP is by using the swap feature on the DRIP website. You can also buy DRIP on PancakeSwap without the 10% tax, but the tax will be applied when you deposit those DRIPs in the network. Based on my experience, buying on the DRIP network tend to get you a few more DRIPs.

It’s straightforward to buy on the DRIP site. Click on SWAP at the top left menu and this takes you to the buy page. Enter the amount of BNB you wish to swap for DRIP. Remember to leave a small amount of BNB for gas fees. You’ll see the number of DRIPs you will get. If you’re fine with that number hit the buy button and confirm the transaction in Metamask. If you’re using a hardware wallet as I recommended in an earlier article, you would need to confirm the transaction using the hardware wallet.

Next you will go the faucet. This is where you will enter your buddy address. This must be done before you can deposit your DRIP. Scroll down about midway and you will see the Get a Buddy section. Enter the buddy address and click update and you will be added below your buddy.

Scroll back up to the top right where you’ll see your DRIP balance. Enter the amount you wish to stake in the deposit box — or just hit MAX if you plan to stake it all. Confirm the transaction through Metamask and your hardware wallet. You will now see your balance in deposits on the left side of the page.

Below the deposit box you will see the hydrate and claim buttons. If you wish to compound your DRIP earned use the hydrate button. Hitting the hydrate button will allow you to claim and deposit your DRIP earned in one transaction. Use the claim button if you wish to withdraw your earned DRIP. Again, you pay a fee for each transaction. The fee is 5% when you hydrate.

Once you start earning DRIP you will see your DRIP stats — deposits, amount available for claiming, claimed to date, rewards, maximum DRIP payout and number of team members on the left side of the faucet page.

It is generally recommended that you hydrate once a day until you reach your target DRIP balance then you start claiming. Hydrating increases your DRIP balance and the amount you can claim. The longer you hydrate the bigger your DRIP balance grows. Even so when you’re claiming you probably want to claim for some days and then hydrate again to keep your account generating DRIPs for longer — assuming you haven’t reached the max payout.

There are many strategies you can use to maximize your DRIP earnings and I will cover some of these in future articles. There are also numerous calculators and spreadsheets created by DRIP community members that you can use to simulate different scenarios for reaching your targets. Here’s one such spreadsheet.

I used this DRIP calculator simulate the growth in DRIP and dollars over two years for a 100 DRIP investment — a little under $4,000 at current prices.

As you can see, a little patience helps. After three months a $4,000 investment turns into $33,439.82 available at a withdrawal rate of $91.62 per month. You could continue to withdraw this $91.62 per month until your available amount is exhausted, continue to hydrate or do a combination where you hydrate on some days and withdraw on others. This way you continue to grow your available amount while still claiming. You can also make additional deposits to grow your DRIP balance.

One strategy I use is to have one parent account and multiple child accounts linked to the parent account. That way the parent account gets rewards when I deposit to the child accounts. This helps my overall balance to grow faster and allow me to continue my income stream from the child accounts when my parent account is exhausted.

The DRIP project is picking up steam with over 17,000 holders of the token and a growing community. The team is rolling out new products which will utilize DRIP and is likely to put pressure on the price. DRIP has a total supply of only 1 million DRIPs (compared to Bitcoin of 21 million) which will likely result in scarcity and further price increases. Of course, a rising price increases your earnings. The mechanics of DRIP suggest it could be good long-term passive income play.

If you found this article useful and is considering joining DRIP, please consider joining my team. Remember you must start with a buddy. I’m available for questions you may have, and I offer airdrops to team members.

My buddy address is:
0xCA5051060d8F3e5dE574Eabe533f9A9C2B7F324E

This article is for information and educational purposes only, and nothing stated herein is to be construed as investment advice. Neither the author nor the publication takes any responsibility or liability for any investments, profits, or losses you may incur as a result of this information. Please do your own research and due diligence before making any investment decisions. The author has made every effort to ensure accuracy of the information in this article, but makes no representations or warranties, expressed or implied, to its accuracy, completeness, timeliness, or correctness. The author may own cryptocurrencies discussed in this article.

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jaycesondon

Accountant (CPA), equity research analyst and crypto enthusiast.