Letter to investors #1
We want to address the most common concerns from our investors about today's performance, share some analysis made by the team and announce meassures taken by the team for the future of Cocktail Finance and the projects that will be released by Yield Farming Club later on. The reason we write this letter it's because we are advocates of transparency and responsability, we can run away with deposit fees and dump all dev rewards, kill the market and enjoy some easy cash like countless projects have done so far in the BSC Network this year, but we are better than that, so we hope with this letter you can get a clearer understanding of today's performance and all the factors that affected it. We will divide evertything in sections so you can jump to the one that concerns or interests you the most.
WHAT WAS DONE BY THE YIELD FARMING CLUB TEAM TO KEEP THE PRICE STABLE:
BURNING $COCKTAIL: We decided to burn all of Dev rewards to cope with the price devaluation. A total of 1.385 $COCKTAIL were burned here you can find the each and every single one of them:
*BURN #1: 80 $COCKTAIL *BURN #2: 175 $COCKTAIL *BURN #3: 430 $COCKTAIL *BURN #4: 700 $COCKTAIL
BUYBACKS: A total of $1640 in USD was used to buy back $COCKTAIL and burn it:
*BUYBACK #1: 300 BUSD *BUYBACK #2: 300 BUSD *BUYBACK #3: 300 BUSD *BUYBACK #4: 300 USDT *BUYBACK #5: 300 USDT *BUYBACK #6: 140 USDT
The result of both strategies resulted in a pump in the price from $1.41 USD to $2.33 USD, this lasted for around 25 minutes before the price dropped back to $1.70 USD after this, we decided to change our approach as you will learn in the next lines.
COCKTAIL PRICE: As you know the startblock inicialized the rewards of the MasterChefV2 today. The price of the $COCKTAIL went from $53 USD to $1.7 USD in a matter of hours, this raised questions and generated some dissapointments specially in the investors who are new to this type of project, this was the most notorious aspect of today's performance so let us address this first:
  • Due to the nature of most Yield Farming projects it is a very common thing to see this radical change in the token prices once the startblock is reached, the main reason being that the initial supply is normally fixed before the startblock but once the startblock is reached the MasterChef contract will start minting 1 token per block (most common emission rate). Keep in mind there's a block in the BSC network created every 3 seconds which means that every hour the contract will create 1.200 tokens which naturally increases the circulating supply, in our case we went from 400 fixed $COCKTAIL for days several days to have 5.200 $COCKTAIL added to the total circulating supply in just 4 hours, each token was valued at $50 very soon there's not enough demand to keep the price up and it plummets natually (simple economic principles). This is not something that happened only to us, this affects 98% of every Yield Farming project deployed in the BSC Network. See the links provided below to check that yourself.
YFC TOKEN: Some people complained about not being enough information about YFC Token and prices being unstable:
  • The YFC Token has been created as a mechanism of rewards and interoperable tokenomics between all the projects released by the Yield Farming Club, no announcement was made intentionaly for several reason some of which are mentioned in the following paragraphs. However EVERY SINGLE TIME someone asked about information about the YFC Token in any of our channels the following was made EXTREMELY CLEAR: All info about YFC will be compiled and provided in an official post soon. YFC Token will be a token intended to provide holders/investors with special privileges for all farms and projects released by Yield Farming Club in the future including Cocktail Finance, some of the advantages will include features like 0% deposit fees, super high APR, access to exclusive pools among several others we will cover in the official annoucement. No extra information has been provided about total supply, ownership status, minting and burning rates, etc. The original price was set at $25 and initial liquidity was provided by the Yield Farming Club team, then traders pumped it to $130 later to $289 and finally $350, this price behavior is totally out of our control and we are indiferent to it we don't endorse it nor reject it, this is a decentralized economy and everybody is free to do whatever they want with any token published by any team, but be careful with how you trade and make sure you manage your own risk please.
EMISSION RATE CHANGE: The emission rate was changed from 1 $COCKTAIL per block to 0.1 $COCKTAIL per block decreasing the APR:
  • This was done to ensure the price did not crash completely, our fomula was a little bit off when setting the allocation points for each pool which is something we apologize for, and this was the only feasible meassure we saw in our hands to solve it. This is only a TEMPORARY meassure, we have planned already several strategies to make sure the price gets as stable as possible for the life of the Cocktail Finance farm and the investors get the most out of our investments.
Many strategies were analyzed and discussed by the team and we came up with a pack of what we think are really solid strategies to make sure our investors can get the most of their investments. All of them will be posted tomorrow.
Stay tuned. Peace.
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