First week recap and strategy rebuild ideas

Hey Koalas,

Koala DeFi Finance started on last Monday, 6 days from now.
Before giving the Koalas information about how we plan to act during the next days, we want to summarize what happened before and since the launch.

We have to admit that the launch was bigger and faster than what the team expect. In less than 24 hours, we reached $ 2M TVL. We were not prepared to such a grow.

The price was really over evaluate before the launch. This was due to a total lack of liquidity before the launch and a high speculation of first investors. At this time an investment of 200$ could make the price x3 easily. We could see on chart that there was absolutely no volumes before the launch. We are sorry for that. We shouldn’t have create the liquidity pairs before the launch.

Just after the launch, the community found a display APR problem with the LYPTUSBNB pair and the dev team solve it within 24 hours. So of our investors was disappointed because they didn’t get crazy APRs but only something around 9000%/year (which is already a crazy APR). We have already give our apologies for that and again, we are sorry.

Something else wasn’t good in the first days of the launch, the APR on the stablecoin USDTBUSD was very good and this farm grow quickly to around $ 1M TVL. This could be good to display such numbers to incoming investors but the problem is that those people who entering into a stablecoin farm are not token holders and don’t really care about the sustainability of the project, they catch the big APRs and then move to another project while hard selling the project token. We learned this in a hard way during the first days of the project and act to reduce the APR on this farm and increase the deposit fees. Was this a good idea? We are not sure because the collateral effect of this action is that the project lost more than $ 900k TVL in few hours. This is not good to see the TVL of a project divided by two in less than one day and even if we try to make a good project with the safest possible contracts, the TVL is a sign of trust for new investors.

Some of you tell us that we manage all these events poorly but we try to fit the best to the strategy explained into the documentation before the launch. Is that strategy wrong ? It clear that we have to improve it. But we fit to the documentation and be transparent along these first days and every investor have to make is own homework before going into a project and this means at least read the documentation. If the ideas expressed into a documentation seems bad for you, please stay out of the project.

Now, we’re facing some problems

Inefficient buyback&burn program

The buyback & burn as no effect : this move up quickly the price and investors take the opportunity to move out from the project. We stop after the first attempt because we can afford to do this buyback & burn program more than few times. As no more investors come into the project, we have not enough treasury to continue such inefficiencies buyback & burn.

Adding more usage and value to LYPTUS token to encourage holding

Community ask us to rebuild the tokenomics to add something that will encourage more people to hold the token. The idea which comes the more often is to add pools were you deposit LYPTUS to earn another token. Community voted yes to this idea, so :

Our solidity and front devs are working on adding pool to deposit LYPTUS and earn another coin but this will take some time to be but in place. It’s a big change into the UI code and need new contracts to be put in place and well tested to be safe before they can be used by our investors. We expect to get these code modifications running into the next two weeks but we can give a date now. Some of you will argue that this is too long and we don’t move fast enough but it’s a reality : no one develop and put safe and tested code in production in 24 hours. This type of pool can only work if we found partnership with other project to give us their tokens to distribute into such a pool. So during the code modifications, we will continue to search for partnerships with other project to try to make this type of pool a reality.

LYPTUS supply grow to fast and burns are not big enough

The LYPTUS supply grow way to fast and some people suggest to reduce the number of minted LYPTUS per block. This is good for limiting the supply but the APRs will be reduced with the same ratio and when APRs go down, investors move away rapidly. We don’t believe that reducing the number token minted per block is a good solution but we will ask the community to vote for this. We can’t burn more token without new investors coming into the project to have enough funds to buyback&burn tokens.

LYPTUS supply isn’t capped

Yes, LYTPUS supply isn’t capped and it’s the model of many farming projects because they need to create new tokens everyday to be able to offer good APRs to their investors. If no more token are minted, APRs are 0% and investors move away immediately. The burn mechanism should help to maintain value to avoid hyper inflation but for this to be sustainable, the project need constant flow of new investors and it’s not the case of Koala DeFi for now

To stop growing the supply of LYPTUS token and maintain value to a project, there’s no many solutions : you have to create a new token and mint new tokens everyday to give APRs to investors. By doing this, you simply repeat the same problem if you’re not able to give trust, utility and value to the newly created token. The Certik audit we ordered will cover LYPTUS and another token which is called BBKOALA to serve this kind of purpose but we will not put the BBKOALA token in production until we have a good idea of is utility and value. We first have to find what we can do with BBKOALA. Any suggestions are welcome from the community.

Certik audit in progress

Some of you are waiting for this good news and the Koala team also. Yes at the time of writing article, the ”in progress page” for Koala DeFi is still not displayed on their website. We filled the agreement and make the payment for a full audit on Thursday evening and our contact told us that is should be reflected on their website within 24 hours. Unfortunately, it still not the case and we think it’s simply because Certik doesn’t work on weekends. Our contact also told us that they are overloaded of demands at this moment. We expect to have this page displayed on their website this Monday. This doesn’t mean that Koala DeFi is audited but only the process starts and Certik maximum delay to give us a report on our contracts is 16th March.

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Conclusions

So the global strategy of the project need to be reviewed and this will not be done in 24 hours. We need time to try to make this real. We don’t give up and continue to work on the project even if this first week haven’t been a very good one.

The Koala’s core team still working and won’t give up but we’re afraid we aren’t moving fast enough in regard of the community needs. We’ve tried to handled so much work within the launch that which we haven’t been well prepared for. With such a huge work to do, it’s hard to follow and act in real time all the community requests.

We know we’ve lost trust from most of our early investors and we’re again give apologies for that but we will continue to look towards till it’s possible for us.

The Koala’s team