High Conviction Trade: DeFi Kingdoms (JEWEL)

First published: December 13th, 2021

Summary

I believe DefiKingdoms (JEWEL Token) is a medium risk, high reward project. The LP Staking rewards will range from 600%-800% over the next 365 days. What makes this project unique is that it is a DEX (decentralized exchange) just like UniSwap or SushiSwap, but with an NFT game built ontop of it. It is currently the #1 protocol in terms of TVL on the Harmony Chain.

Axie Infinity created a game, then the Ronin wallet, then introduced staking, then the Katana DEX. Defi Kingdoms is doing the same thing, but in the opposite order. They started with a DEX with LP and staking rewards, and are building out their NFT game afterwards. So far it has shown successful, with $280m in TVL (Total Value Locked).

Current Price: $6.54
Current market cap: $400mil, rank #188 on CoinGecko

Target Profit & Scenarios

I am forecasting a 2x-10x return for holding for 365 days.
For example if you take $1000USDC and buy 142 JEWEL (current price is $7) and stake it in the JEWEL-ONE LP pool for the next 365 days, you will have 852 (142*6) JEWEL by the end of it. We will assume the staking rate is 600% on average for the duration.
– = Neutral scenario: If the price of JEWEL stays flat, that means your 852 JEWEL is worth $7/each totaling ~$6000. That’s 6x.
– 📉 Bearish scenario: If the price of jewel goes down -81% then your 852 JEWEL is worth $1.12/ each totaling ~$1000 meaning you break even
– 📈 Bullish scenario: If the price of JEWEL goes up 50%, then your 852 JEWEL is worth $10.50/each totaling ~$9000. That’s 9x.

Current status of position from deposit to 30 days later. $1000 JEWEL + $1000 ONE = $2000 position.

The rewards started at 0 and accumulated at about 2% interest per day to result in 115 jewel after 30 days. There was also price appreciation of JEWEL from $6 to $12. You can see the APR of the rewards decreased from 841% to 650%, this is because of the natural decrease but also because the deposits increased by 30%. You cannot fully access your locked rewards until July 2022, so we’ll have to see where it from there.

Risk & Other Data

Risk: The game is built on the Harmony Chain. JEWEL has a high correlation with Harmony, so Harmony drops, this is likely going down too. However, this game is strategically deciding to be cross-chain, already building out a link to the Avalanche Chain
Exchanges: Not currently listed on any exchanges, because its a DEX itself. You interact to it through the Harmony Chain on Metamask.
Strategy: Buy and hold Jewel and collect LP rewards. You can also buy a hero if you want to try the game, but the value is less predictable.
Catalysts: The game will launch an expansion each time they expand to a new chain. For example they are introducing a new world called Serendale that is built on the Avalanche chain. You will be able to take your heroes across and play on those maps as well. When they launch PvP features and if the game is really fun, we will definitely see a spike in the utility for jewel.

DappRadar

DefiKingdoms from Nov-Dec had about 283,000 monthly active users vs. 750,000 on Axie Infinity.

You can view the historical APR of the coin here

APR started at 820% and has now reduced to 540%
https://app.multifarm.fi/assets/HARMONY_Defi-Kingdoms_Uniswap_JEWEL-WONE

Development Roadmap

Purchasing A Hero (If You Want To Play)

In this next section I will show you the heroes I bought and how I chose which ones to buy. My goal was to buy cheap heroes close to floor price, that would be decent at professions. I optimized for professions stats ONLY, not for summoning, rarity or future pvp stats, etc.

I bought my first two heroes on DeFi Kingdoms

Hero on the left will be an 18stat forager. Hero on the right will be an 18stat Gardener 🙂

Found a 21stat miner for 49JEWEL, seems like a pretty good deal! Edit: Later sold for 70JEWEL after mining quest launch.

http://dfktavern.com/ – this tool shows analytics on price history in the tavern

https://www.reddit.com/r/DefiKingdoms/comments/qpotgf/analysis_on_profession/ – This post summarizes the best profession to buy for questing. Basically you want to choose a profession bonus and maximize the two correlated stats and ignore everything else. For example, for a fishing hero you want to maximize luck + agility and ignore all other stats.

What Heroes Should I Buy For Each Quest?

Firstly you need to check off the main profession. Secondly, you want to maximize the stat professions and minimize the cost.
So for example for Mining you want the highest (STR+END) for the lowest cost.
18-20 of a stat total is a good place to start.