This blog post has been updated and published in a new version after the ‘crypto winter’. DRIP is still very much alive but due to price changes this article is not up-to-date, but DRIP is the same. The revised blog post can be found on this link
How to Use a Defi Platform to Earn Passive Income – Step by Step Guide to +$100K
What is DRIP?
Drip Network is a decentralized platform on the Binance Smart Chain that gives you 1% rewards in Drip tokens each day. You can either sell your Drip tokens to get cash, or invest them back into your initial deposit to receive more Drip rewards. Follow this:
- You have 100 Drip in you deposit account
- Every day, you earn 1 Drip (1%)
- You can choose to claim that 1 Drip and sell it into something else (BNB, USD, EUR, …)
- Or you can compound – reinvest – it into your deposit, which will now hold 101 Drip. You will now be earning 1% of 101 drip every day, or 1.01 Drip.
So how is this sustainable you might be thinking?
Well, every buy, sell, transfer, deposit and so on is taxed 10%. It is these taxes that pay for the 1% rewards that are pushed out to all of us with Drip in our deposit accounts. Only exception to this is buying Drip on the Drip platform (0% tax) or reinvesting your deposit (5%).
Alright, ready to start on the journey toward $100K per year?
1) Buy Drip on the Drip Platform
So, for this you need $100 to spend. You can of course start with less or more, results will just come later/earlier.
Now you are ready to get started on the path to building a stream of passive income. The first thing you’ll need to do is convert your USD or other currency to BNB on the Binance Smart Chain and buy Drip within the ‘Fountain’ on the Drip platform (https://drip.community/fountain). Because we’re buying it on the platform, we do not have to pay a tax. At the current price ($0.39), you now have 256 Drip.
2) Deposit Drip into the Faucet
You will probably get the water theme terms by now, so the faucet is the staking rewards deposit account on the platform. 1% a day is what you will receive once your Drip is in the faucet. As a result of the 10% tax, your balance will now show 230 drip. I will share my address if you need a buddy address: drip.community/faucet?buddy=0x41F7edc6ACe7652EA0E5Aee518556286c392D498
3) Receive your first Drip and Hydrate
Once your Drip is in the Faucet, it will immediately start to generate the 1% daily rewards. About 24 hours later, it is time to make your first reinvestment into the Faucet, or ‘hydrate’ — which is what it is called on this platform ( 1% of 230 is 2.30 drip, but we also pay a 5% tax for compounding or ‘hydrating’, which puts our new balance in the faucet at 232.185 Drip. (230 + (2.30*0.95)).
4) Hydrate Daily for a Year
You’ll continue to hydrate every day for 364 days. On the 365th day, we will have 8690.19 Drip in our ‘Faucet’ account ($3389 at the current price of $0.39), which means that we are earning roughly 87 Drip per day ($33.93 at the current price of $0.39). You’re now making enough to retire on a +100k salary!
5) Claim 4 Days a Week and Hydrate the Other 3 Days of the Week
So why not just claim your 1% every day and live off of that?
First of all, we need to keep in mind that the Faucet has a Max Payout of 3.65 times the deposit amount!
This Max Payout is the maximum amount that can be claimed (taken out of the Faucet) based on the current deposit amount. So our Max Payout at a deposit amount of 8690 Drip is 31 718 Drip. This means that if we claimed every day, our Max Payout would stay the same, and we would stop getting our 1% reward once we hit 31 718 Drip (when ‘Claimed’ = ‘Max Payout’). But if we hydrated some days and claimed others, our deposit amount would continue to grow as well as our Max Payout amount. So we need to know — what is the maximum amount of times we can claim a week without reaching our Max Payout? The answer: if we claim 4 days a week and hydrate 3, we will not hit our Max Payout amount (until we hit the maximum-Max Payout amount of 100k Drip).
6) Retire or work less or ...
Regardless if you understand the last step, we now know that we should hydrate 3 days a week and can claim the other 4. So how does this math workout to a +100k salary? Let’s look at it:
- 8 690 Drip in the Faucet rewards 1% a day or let’s round to 87 drip per day
- 87 Drip per day works out to $33.93 per day at the current price of $0.39
- There’s a 10% tax to claim Drip out of the Faucet, so $33.93 * 0.9 = $30.537 per day
- There’s another 10% tax to sell Drip, so $30.537 * 0.9 = $27.48 per day
- We’re claiming 4 days a week (as explained above), which works out to $27.48 * 4 = $109.93 per week
- And with 52 weeks in a year, 52 * $109.93= $5 716.53 a year → you’ve made it!
- Wait – that’s not 100K per year? Correct,
Note: To perform this exercise, we had to assume that the current price of $0.39 would stay the same over the course of the year. There has been a low of $0.30 and a high of $186 since the launch, so the price could or rather will fluctuate. After the 12 months, we would still be hydrating 3 times a week, increasing our deposit in the Faucet, so our salary would continue to increase over time. I mentioned that there is a maximum-Max Payout of Drip at 100k. If we add more to our deposit, the Max Payout in our Deposit will no longer grow, even if we add more. We will want to claim every day and transfer our money to another wallet in order to continue getting the 1% rewards.
Nothing in this article 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. The article may contain affiliate links.
Set To Go?
I hope you’re now about as excited as I was when I discovered Drip. It’s a revolutionary platform that provides a sustainable source of passive income. With a little patience and a little persistence (connect each day to click the hydrate button!) you can also realize your financial goal utilizing crypto compounding.
How to get started with DRIP
1. Go to https://drip.community/fountain and exchange BNB for DRIP using your Meta Mask wallet or Binance Smart Chain wallet. You’ll need at least 1.2 DRIP if you want to deposit it later to earn the rewards.
2. Go to https://drip.community/faucet to deposit the DRIP that you purchased. You’ll need to enter a buddy address in the Referral section in order to make a deposit (clicking the ‘Buddy Detected’ button will automatically populate my buddy address in the field).
Consider joining using my buddy address: 0x41F7edc6ACe7652EA0E5Aee518556286c392D498
3. Deposit at least 1.12 DRIP to receive 1 DRIP in your faucet (Note: Make sure you have enough BNB to pay for the gas fees which are typically ~0.01 or less per transaction. I suggest you leave 0.1 BNB)
4. Once deposited you’ll start to receive 1% daily. Every 24 hours compound by clicking the HYDRATE (re-compound) button.
Decentralized finance is a system by which financial products become available on a public network. They’re open to anyone to use, instead of going through a middleman. Government-issued ID, Social Security number, or proof of address are not necessary to use DeFi. It is possible for buyers, sellers, lenders, and borrowers to interact peer to peer or with a strictly software-based middleman rather than a company or institution facilitating a transaction thanks to the Defi system.