Why is the DRIP price crashing (2024)

TLDR — it is not because of any problems with the system. It is players in other Drip related projects using Drip as buy-in forcing the price down. Now there is panic selling as people think there is a crash. Also we are coming off a high of many new drip accounts. Now is the time to buy!

Update — added as part of this story to the end of this article.

Update — I wrote the article Drip — Selling is the wrong strategy that focuses on how it is a mistake for small holders to sell (claim) in some attempt to recover their deposits. And there are much much much better options.

Update — I should have included macro-economic impacts that are currently affecting every market around the world. Russia’s invasion of Ukraine is continuing and Putin has even made remarks about nuclear weapons. These are the kinds of economic situations that drives all entities down regardless of what value they hold. Fingers crossed that this war is over shortly (and I personally hope the Ukrainians come out better than the Russians). I am personally buying as the price keeps going down. History has shown us that all markets recover after such events like this and they always recover rapidly.

All the chicken littles (no disrespect intended PasPio) are seeing a chart such as this one that follows — it is showing the DRIP / BND price for the last month (to March 7). The sky is falling.

Looks pretty grave. Lets take that out to a 3 month view.

Wow the price shot up. But it started coming off. Is the price reduction because people now realize that the Drip project is third-rate and are abandoning the ship?

I argue here that the Drip project is sound, that this decline can be explained and we should continue to play the Drip game of hydrating until claiming. And better still, take advantage of the current lower price and buy more drip. I am quite confident that it will be higher than it ever was. But as long as the panic selling stops.

Lets pretend that the price continues to decline and you bought in at the top. I discussed this kind of situation from a personal perspective in my article

In there I stated that I setup 13 wallets with a good number of Drip for around US$100 per drip, and that if the price reduces in value by 0.5% per day, then over the life time of our wallets the final price for our final claim will be US$0.06 — a 99.4% decrease (*). However by the end we (my family) will still make over US$100,000. Truly. And that is because of the 1% interest earned every day. After hydrating all of the way (after some claiming), our wallets will contain 439,000 Drip.

(*) — I wasn’t clear in my other article. The price is NOT 6 cents for all the time we claim — only at the end after a steady and continuous decline.

So I am not worried — even if the price does decline 99.4% we still walk away happy.

But I don’t believe the price will keep declining and will appreciate shortly. What we are currently seeing is a buying opportunity. I am buying more so our wallets grow more quickly and reach maturity faster.

There is no one thing anyone can definitively say as to why the Drip price is depreciating. I will present a number of sound and logical reasons around events that have occurred that individually would have little effect, but as a whole seem to be pulling the price lower.

Massive influx of new accounts

Look at this chart from charts.mongdb.com showing the number of new accounts (wallets) over time.

Now look at the chart showing the Drip / BND price (sorry I can’t find data prior to the end of July 2021).

Do you notice the similar shape?

One good thing about the design of the Drip network is that once you have enough Drip purchased, you can just sit back and let it hydrate (compound). One of the bad things about the design of the Drip network is that once people have bought their desired quantity of Drip, they don’t need to buy any more.

All these new accounts were created and they were filled with enough Drip. So the price went up. After this was done, the demand lessened and the prices fell. Economics 101.

Why, you ask, aren’t more people joining (IE. new accounts)? I suspect that the market reached saturation — the number of people who believe in cryptocurrencies is quite limited. I know this is hard to believe for us crypto-maximalists. But it is true. I’ve been speaking to people about crypto for 5 years now in my general circles and I estimate that 80% reject cryptocurrency as a fad, magic-money that has no basis, is too volatile, a scam and even worse — the work of the devil. In my extended family of 20 only 4 believe in it and one is me.

This is actually fantastic news for us since it means we are still the early adopters and will have the advantages that provides —

• from a capitalist perspective — our investments will grow 100 or 1000 fold;
• from a socialist perspective — there is so much more liberating that is yet to be achieved.

On this last point check out the following article. It contains many impressive, clean and logical arguments about how Cryptocurrencies are taking us towards a better world. Read it and subscribe to the podcast that centers around moving to a bankless world.

People stopped buying but have they been selling?

Has any selling been happening?

Yes — look at all the blood that has been spilled in the last month.

There are three speculations that suggest why this has happened:

1. People are no longer convinced about crypto
2. Piggy Bank
3. Panic “selling”

On the first, perhaps people who bought in to Drip crypto actually didn’t believe in it. But their friend, brother, mate at the pub etc… said its a good thing. And the prices was increasing! FOMO! When the price started going down their negative beliefs in crypto were vindicated.

I’m sorry to hear that. But I believe you are wrong.

Piggy Bank

Forex Shark and the development team behind the Drip Network started a number of other projects in the last 6 weeks — the Animal Farm and the Piggy Bank.

The Animal Farm started about the time of the first vertical appreciation in price around the 24th January. Participants in this required Drip tokens and many were bought sending the price up.

The Piggy Bank started on the 5th March 2022 and will use Drip, but not until the Piggy Bank Lottery kicks in, which might not be until April. So there is no current desire in that project for Drip tokens.

What’s worse is that investing in the Piggy Bank required Pig / BUSD Liquidity tokens. The funds for these had to come from somewhere and the community suggested that most of this came from Drippers claiming their Drip tokens from the Drip Network (perhaps the logic being a “crypto budget” and no new funds could be injected). Hence the selling.

I am critical of Forex Shark and his team for the machinery of the Piggy Bank. This entire landscape is evolving and anyone could be forgiven for not being across such inter-plays. But these people are professionals and they need to get it right. On the bright side I know that they are cognizant of the Drip price situation and have set their sights on solving it and to prevent bad machinations happening again on future projects.

Panic Selling

My thesis of this article mostly revolves around the panic selling.

I speculate that the Chicken Littles saw the sky falling and started claiming (and continue to do so) in order to get the hell out.

Take a look at this table of Drip buy and sells from today (7th March) on PancakeSwap.

This is a small sample of 33 recent Drip transactions (I eyeballed the 1000 or so most recent transactions and they all look to follow this pattern). In this we can see that there is 1 buy for decent amounts (smart people buy low), one or two are ok size sells (claims) and 30 or 31 are claims for piss-in-the-wind size amounts of Drip.

I suggest that the larger sales are by Drippers wishing to get in to the Piggy Bank. And that the smaller sales are from the panic sellers trying to cash out. Me, as a Dripper who is not panicking, would not “sell” such tiny amounts. Instead I would accumulate smaller claims in to larger chunks — it makes record keeping for tax less painful. And I wouldn’t be selling out now anyway. As we saw, lots of people joined Drip recently and may not yet have realized the power of Drip and compounding.

I’m not casting judgment on the Drippers that are trying to get out (but like Hotel California, they can never actually leave because your deposit remains!) The price started falling and they panicked. Its an instinctual response but one that uses the primitive part of the brain. Instead we need to hold off and wait for our logical brain to kick in.

For those interested in this topic take a look at this book.

A good book about how Fast and Slow relates to investing is Behavioural Investing — I highly recommend both.

And my evaluation for why I believe Drip to be a good investment.

A good investor will carefully consider any investment that is presented to them and build up a set of evidence that supports their reasons for entering into it. There are two types of investors — short term day traders who aim to invest millions and exit on tiny increments. Their justifications are based on detailed financial analysis that is obviously complex and very dynamic in nature.

And long term investors that have a strong belief in the fundamentals of the company they are investing in. Drip.community is one of these.

When I was introduced to Drip.community and started sensing this could be a good thing, I spent 2 solid days reading, pouring over the Kelly Snook and Drip Faucet Calculator spreadsheets, and performing my own analysis.

One of the first pieces of analysis I did was “how much money will I make if I hydrate all the way and then claim till the end”. Nearly US$4 million per wallet. But I won’t start receiving money until 18 months after starting.

Tick ✅

I considered the price depreciation problem and looked at possible Drip strategies. Both spreadsheet calculators help with this and show that alternate days of hydrating and claiming will earn the Dripper the same amount of money. However the payouts will start earlier — within 6 months and will take a little longer to reach the end.

I will start this alternating cycle when the price starts to appreciate. And it will take 9 more months to pay off my deposit. After that everything is profit. If the price made it back to $100 and remained stable I will have claimed $240,000 by Christmas 2023.

Tick ✅

Next I considered a depreciating price. I discussed this above and in the article DRIP — The five stages of grief.

Let me look at the current situation where the price is decreasing by around 3% per day. And let me do what the panic sellers are doing and claim every day. It would take me 10 more months to pay my deposit off and I would come out with $20k left over as profit. But my wallets are now dead.

Now what happens if instead of claim every day I choose to alternate between hydrating and claiming? It would take about the same time to pay off the deposit and after that time I would have 1300 Drip paying nearly US$500 per day. And that would keep growing every day with the 1% and would continue that way for another couple years.

I know which one I’d chose — Drip is so well designed it allows for this (SO for gawds sake could everyone stop continuously claiming — look the evidence is here for a better strategy!!!!!!).

Tick ✅

Next I thought about the project. If I’m in it for 4 or so years then the Drip token needs to remain useful for all of this time — either through a continuous line of new Drippers or some other projects that use the Drip token.

The current road map has been released and my Buddy has already performed an excellent article on this.

(Use me as a Buddy, not Ryan should you need one!)

️Tick ✅

Now I have to enter in to a bit of speculation territory.

I am part of a couple Drip teams and participate in their conversations on Telegram or Discord. From this exposure I believe I understand some of the big picture from Forex Shark and Developers. Including:

• To extend the reach of Drip — A focus will be on making it a common token across projects outside of Forex Shark’s realm.

We can see this happening already, where Drip is on available on multiple exchanges. Such as Pancake Swap, CoinGecko, Coinmarketcap and Coinstats. These listings in themself don’t mean it will be used in other projects, however this is an initial critical step that enables this.

(I’m calling this a) ️ Tick ✅

• Forex Shark has discussed the need to get Drip in more peoples faces and will start turning his attention to marketing now that the PiggyBank is underway.

For example China — I understand that it has apparently become one of the biggest focuses. China has a population of 1.4 Billion people. Imagine if my ratio of 4 in 20 or 20% are in to Cryptocurrencies, and 10% of these find their way to Drip. That’s 28 million people. That dwarfs the current 81,000 Drippers.

(I’m calling this a) ️Tick ✅

As an investor I have done my homework and satisfied myself that this is a good project. Except for all this panic selling that appears to be going on.

Please everyone, STOP SELLING as part of a panic strategy!

For starters it won’t help. Your deposit is no longer available to you and the only way to get it back is to claim. But you can only claim 365 times over 365 days. This will earn you 2.9565 times the deposit (3.65 after taxes). This is still not a bad payout and kicks any bank in the pants.

But this does not make sense. By hydrating more times than you claim (until you reach Max Payout), you can increase this payout to 30.5361 times the deposit per year. Talk about kicking the bank’s butt!

The sky is not falling. Too much claiming is both a poor strategy for a player and for the Drip community. As we can all see, the price is dropping. It scares the pants off Drippers leading to more panic selling.

Stop it now! Take a deep breath and take advantage of the lower price and invest instead — buy more Drip. If you want to get out, having more Drip tokens will get you there faster! If you are too scared to put any more money back in, just sit on what you have and turn to hydrating instead of claiming. If enough people return to this the price will start growing again. And then you will be cranky with yourself for not buying more while the price was so low!

But if all else fails and people keep selling then the price will eventually reach a point where the remaining players will recognize there is again value in Drip and will start buying again. So it should still succeed as a project even in the worst case.

The only Drippers who would no longer be in the game are the ones that claimed the life out of their deposits (when they hit the 365% limit). They screwed it up. Hopefully not for all of us.

The Drip price has depreciated for a combination of reasons — the mechanics of Drip related to new accounts where enough Drip tokens have been purchased; the starting of the Piggy Bank that used Drip tokens as funding. And then the panic sellers who saw a decline in what was a stellar price and thought the sky was falling when this dropped off so wanted to get the hell out of there.

Though rest assured that the fundamentals of the project are sound and Drip.community along with other Forex Shark projects have a bright future (or at least a lot of potential).

We just need to stay the course and keep playing the Drip game. It will all be OK.

The smart investors will realize that the sky is not falling and instead buy — buy Mortimer, buy!

More information is coming in about the prices of the various related projects and I will update this information here. Drip.community, Animal Farm, Piggy Bank.

Animal Farm has been under a large amount of selling and this would have affected the price of Drip for similar reasons to what has been discussed. The details from a Telegram group chat are:

- Just prior to the [Animal Farm] countdown timer completing on launch day, a bad actor was able to use a Bot and buy Piglets for pennies each and got over 94,000 Piglets.

- They had approx 23% of our total liquidity.

- This person did a NON time locked stake, so were immediately selling their LPs as often as possible, draining the protocol.

- They sold over $600,000 in a short period of time.

- This caused the price of PIGS to plummet.

- Some people seeing this price action probably also fire sold, further pushing price down.

- The wallet address associated with this account has now been BLACKLISTED.

- This means they cannot sell any more of their LP. And no, they can’t swap their piggybank smart contract to a new wallet address to get around it.

- Now that this bad actor is out — price of pigs has gone from approx $128 to now $189 in a matter of only 30 minutes — which is great!

[4 hours later] — Forex Shark says:

I just had a conversation with my partner and he did do extensive analysis yesterday and determined that yes indeed that person who got a large portion of the supply did bot. We don’t have the ability to blacklist people in the Piggy Bank but we did build in a function to prevent botters from spending PIGS and he prevented the botter from spending PIGS.

Now if you aren’t already a Dripper and my article has piqued your interest plus you recognise a good bargain when you see one, then please join my Drip team.

See my other articles:

• DRIP — The five stages of grief
• Drip — a detailed setup howto for noobs
• Drip — essential security

When you are ready to start, use this buddy link:

drip.community/faucet?buddy=0xcf4a851B797107927B23B3E4648f66d05B983C4E

Then, enter my wallet address to sign up as my Buddy:

0xcf4a851B797107927B23B3E4648f66d05B983C4E

I am part of the BlockStoxx team and invite you to join the Discord server. Tell them bbos sent you and that you nominated me as your buddy.

Author’s Disclaimer: This is not trade or financial advice. This information is being presented for entertainment purposes and represents the OPINION of the author. All trading and investing, whether real estate, stocks, or crypto, involves the risk of loss, sometimes greater than 100% loss. Do not trade or invest with funds you are not willing to lose. I am not responsible for your trading errors, trading losses, or missed opportunities, even if you are a part of my DRIP Team. Please do your own research and verify information for yourself. Any reference to an investment’s past or potential performance is not, and should not be construed as, a recommendation or as a guarantee of any specific outcome or profit.