Continuing to push the barriers of what is believed to be possible in DeFi, with its new Sponsored Farms, Don-key Finance is now the only yield farming protocol to offer guaranteed weekly APR.
Given that Sponsored Farms breach new territory, the below numbered questions are meant to address any lingering uncertainty that the community may have.
- What are Sponsored Farms? Sponsored Farms allow investors to deposit single assets and farm them for a guaranteed weekly return.
- How are the profits paid out? Profits are given out entirely in the form of $DON token rewards, while the initial investment always remains in the native token (i.e BUSD) and is never converted to $DON. Only the profits are converted to $DON right before they are harvested.
- What determines how much APR investors get? Tier levels determine how much APR investors earn in a given week. The higher the tier, the more an investor will earn in APR each week. To learn more about Don-key’s tier system, click here.
- Do Sponsored Farm’s weekly APRs change at a specific time? Yes, Sponsored Farm APRs update every Monday at 12:00 UTC.
- What if the investor does not harvest rewards before APR rates change? Nothing happens. Weekly profits are automatically saved and locked in smart contracts; so there is no need to harvest and withdraw before APR rates change.
- What tokens can be invested in Sponsored Farms? Currently investors can deposit in BUSD, CAKE, and WBNB; but many more tokens will be added soon.
- Do Sponsored Farms have any fees? Sponsored Farms only have a 0.5% entry fee to pay all gas costs, swapping and bridging associated with the farming strategy. Sponsored Farms do not charge the 5% farmer and 5% platform fee.
- How does Don-key guarantee weekly APR? Don-key is able to guarantee weekly profits by analyzing past performance in order to predict short term weekly farm returns. Generally, Tier 0 earns the equivalent of or slightly less than the real APR that the farm generates, while higher tiers earn additional rewards from Don-key’s treasury.
- What is Don-key’s tier based staking system? Beyond LP staking, tier based staking gives community members access to many perks and rewards according to how much $DON they stake. Among these perks, Sponsored Farms give out extra token rewards according to the tiers above.
- What if the $DON price increases or decreases while farming profits accrue? $DON Farming rewards are pegged to the U.S. dollar, changes in the $DON token price do not affect investor returns. If, for example, the $DON price decreases, then the investor will simply earn more $DON so that the profit dollar value is maintained at the time of withdrawal.
- What if native token price (i.e $CAKE) increases or decreases while farming profits accrue? Native token price changes will impact user investment. If for example $CAKE’s price doubles while an investor is in a Sponsored Farm, then the value of his investment will double. Each week guaranteed APR is calculated according to the current price of the native token, ensuring that investors have a clear and intuitive understanding of Sponsored Farm profitability.
- Is the initial deposited investment exposed to the $DON price? No, neither initial deposit nor profit is exposed to $DON price. Initial investments are never converted to $DON and profits are pegged to the U.S. dollar.
- Do Sponsored Farms auto-compound? While Don-key automatically compounds the invested native token in order to generate the highest possible APR, $DON rewards are not compounded. Investors can manually compound them by harvesting and reinvesting them but will have to pay the 0.5% entry fee each time that they redeposit. Read below for a deeper explanation as to why harvesting and reinvesting equates to additional compounding.
- Why did my staking rewards disappear? Whenever you join or increase your investment in a Sponsored Farm, $DON rewards are automatically harvested.
- What is Don-key’s unstaking policy? Investments are claimable within a max period of 24 hours in order to streamline investment cycles, while $DON rewards are claimable on the spot. However, staked $DON tokens within the tier system have a 14 day cool off period after unstaking.
Differences Between Sponsored Farms and Community Farms
Rewards and Compounding
In Sponsored Farms the rewards are in $DON, while Community Farms offer rewards in the deposited native token.
While there is no benefit to harvesting rewards and reinvesting them in Community Farms, investors can actually earn additional income by manually harvesting and reinvesting in Sponsored Farms. By doing so, they are compounding extra $DON rewards (on top of the already compounding native token yield) and therefore earn extra yield.
The advertised guaranteed APR does not account for additional income earned via harvesting profits and reinvesting them manually.
APR (Annual Percentage Rate) vs APY(Annual Percentage Yield)
In Sponsored Farms investors earn a guaranteed APR that changes minimally week to week, as strategy yield varies over the course of time. The APR guarantees a rate of return applicable to the week but measured in annual metrics. This means that the APR given tells the investor what they would earn in the year if the APR was constant for the duration of the year — without accounting for compounding. It’s one of two common tools used by investors to assess a farm’s potential profitability.
Community Farms, on the other hand, display returns in terms of APY, which is a projected forecast that factors in long term compounding.
Sponsored pools have absolutely no risk of impairment loss. Investors will get the exact return guaranteed each week. However, Community Farms vary in their exposure to impairment loss, running the spectrum from no risk to high risk.
Join Sponsored Farms
If you’d like to enjoy guaranteed weekly yield farming rewards, simply stake $DON according to the tiers listed above and join one of the Sponsored $CAKE, $WBNB, or $BUSD farms listed at the top of the Dapp, linked here.
To buy $DON, click here.
To stake $DON, click here.
About Don-key Finance
Don-key.finance is building the first social trading platform for yield farming, bringing together liquidity providers and yield farmers alike. For this reason, the community refers to Don-key as the eToro of Yield Farming, which is a title the team embraces wholeheartedly.
The goal of the platform is to eliminate yield farming’s infamous complexity and replace it with a seamless retail experience, streamlined to offer the most profitable and adaptive product on the market.
With just one-click users can route their liquidity — in whichever token they chose — through professionally designed strategies that are updated to chase the highest available APY while minimizing risk.
Competitive Yield Farming is a full-time job; Don-key does it, so you don’t have to.