Mechanics and Sustainability

How DRIP Pays Those Phenomenal Returns

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At the core of the DRIP Network is the DRIP token. The entire ecosystem is powered by taxing DRIP transactions and functions to provide rewards to the end users like us.

 

Here are some of the prominent taxes:

  • Token Buy Tax: When you buy the DRIP token, you pay a 10% toll to the network. The only exception is the Fountain swap on the official website, which covers the buy-in tax for you.

  • Faucet Deposit Tax: Putting your DRIP tokens into the Faucet, the component that pays you 1% daily rewards, is going to incur another tax of 10%.

  • Faucet Withdrawal Tax: When you take your assets out of the faucet, you’ll have to pay another 10% tax.

  • Hydration Tax: You can also reinvest your earnings into the Faucet automatically. The platform calls this hydration and charges a discounted tax of 5%.

  • Token Sell Tax: Finally, when you convert your DRIP back to BNB, you’re hit with another 10% tax.

 

The list of taxes goes on and on as there are other charges too covering all the different components and mechanisms of this network.


At this point, most people are a little put off by all the taxes. But the thing is, the revenue from all those charges doesn’t go into the pockets of the creators but actually drips down into the wallets of investors like us.

 

All that taxation is the reason DRIP is able to pay 1% compounded daily returns. But that also begs the question: is this really sustainable? Is DRIP Cryptocurrency going to burst at some point?

As DRIP offers a multi-tiered rewards system where you get rewarded not only for your own investments but also the users referred by you, the sustainability of this project is one of the biggest concerns.

 

The creators of DRIP are well aware of this concern, and their response is the ingenious game theory elements baked into the core design of this project.

 

Let’s look at some of the factors that contribute to the sustainability of this project.

Deflationary Tokenomics

Every other rewards crypto project works on a hyperinflation model. Take Wonderland TIME as an example. While that project pays attractive returns as well, it does so by creating an unlimited supply of new TIME tokens. But unless the demand keeps growing exponentially, their token is destined to lose value drastically.

 

With DRIP, however, there’s a limited supply and it shrinks by the day. That’s because every DRIP token deposited into the Faucet is sent straight to a burn wallet. That’s on top of all the tokens that will be locked into the liquidity pool through the reservoir contract.

 

As time goes on, fewer and fewer tokens will remain in circulation, making each token worth more.

Crash Resistant Mechanisms

A common point of failure for projects like this is when a mega whale dumps the bag and sends the market nosediving. But not with DRIP Crypto. The creators have put anti-whale mechanisms in place that make it impossible for whales to eat up all the profits or crash the market. For instance, if someone owns more than 10% of the circulating supply, they are charged a whopping 50% transaction tax!

 

Another challenge for multi-tiered, high-ROI projects like this is when growth slows down yet reward payments keep on piling. With DRIP, however, these issues are already accounted for as the team has put a soft cap on the supply.

 

What that means is that in the event of taxes failing to cover the cost of paying the rewards, the DRIP creators could create new tokens to keep the economy running while they fix the game theory issue that caused a lapse in the first place.

Potential for Utility and Use Cases

To understand the sustainability of this project, you have to look at their game plan here. While the creators haven’t publicly shared most of their plans for the future yet, it’s obvious that there are going to be some exciting developments in the future that will bring utility to this project.

 

The goal with projects like this that offer unprecedented rewards is to bring a ton of capital into the ecosystem first and then deploy innovative applications by leveraging that inflow.

 

For instance, DRIP is already working on NFT rewards that will nudge the platform towards some independence from tax revenue alone. These NFT rewards will go to players who hit specific goals, win team competitions, and use new applications under development like the cross-chain bridge.

 

Another extremely powerful application for this project could be the potential for DRIP as a reserve crypto token. Most projects that maintain a reserve have to rely on fiat-backed assets like BUSD and so on. But DRIP could position itself as the perfect, wholly-decentralized reserve currency for the entire crypto space.

 

Here’s why that’s a real possibility. DRIP users are extremely incentivized to keep holding their share of tokens. As a result, the odds of the project losing its value are slim. So by holding DRIP tokens as a reserve currency within their coffers, other crypto projects can bring some stability and credibility to their creation.

 

Again, that’s just one example of many possible utilities that DRIP could aim for once the ecosystem grows.

Key Takeaways on DRIP

Despite the mouth-watering returns and eye-popping taxes, DRIP Crypto is here to stay because of all the potential it has for future applications.

 

Unlike most high-ROI, multi-tiered projects, DRIP is hoping to attract capital into the ecosystem by offering phenomenal rewards. These rewards will be paid through taxation to keep the ecosystem growing at a rapid pace. But once the ecosystem matures, DRIP will be able to deploy innovative applications to mitigate its dependence on tax and bring additional layers of revenue.

 

Memecoins, NFTs, P2E gaming, metaverse, and reserve currency are all potential candidates that the DRIP brand could pursue in the future.

 

But even if we put aside the potential for utility, DRIP has ingenious game theory elements that make it resistant to crashes and sustainable for the foreseeable future.

Final Thoughts

Cryptocurrency is a volatile industry and there are some risks involved just like with other investments. One must invest their money only after performing thorough research and according to their risk appetite. I hope this article has informed you about the possibilities of generating a lucrative amount through the DRIP Crypto network. This isn’t financial advice and one must invest only that amount of money that they can afford to lose. Learn more about DRIP Crypto through the DRIP litepaper.