When profits are realized while using Dex, Drop tokens are deposited into your portal wallet or can be transferred into an external wallet of your choice. Once Drops are deposited into Dex they are placed into the appropriate trading risk pool. Your Drops must remain in the pool for a period of 15 days before a payout can be collected, but your initial capital can be withdrawn at anytime and forfeit any unrealized profit. This guide outlines how the payout is handled when the price of Drop tokens increase or decrease between cycle start and finish.
Drops Deposit Calculation
Dex platform 1.0 displayed the live market price of Drops in the upper right-hand corner, this value was used to inform calculations within the portal such as “Net Worth Today.”
Since Dex platform 2.0 was released, your Drops value upon deposit and payout is calculated upon the market’s 24 hour average (as opposed to live market price). This is being done to protect Dropil and its users from price manipulation as live market pricing provides an incentive for large pump and dumps which long-term would hurt the sustainability of the company and give an unfair advantage to users with big accounts over the average user.
All returns are based on the original USD equivalent value at the start of each 15-day cycle, the principal Drop balance is never impacted by the current Drop price.
Initial Dex Deposit: 100,000 Drops & Drop value = $1 each at the time of deposit. Aggressive risk level is used, re-contribute is enabled. The first cycle has a 15-day return of 3%
Drop Price Stays the Same
Price doesn’t change. The user would receive: $3,000 -> 3,000 Drops. The user’s total drop balance is re-deposited into Dex with a total portfolio value of $103,000 (103,000 * $1)
Drop Price Increases
The price of Drops increases to $1.50.The user would receive $3,000 -> 2,000 Drops. The user’s total drop balance is re-deposited into Dex, with a total portfolio value of $153,000 (102,000 *$1.50) In this scenario, the user has a larger net worth, but a smaller overall Drop balance.
Drop Price Decrease
The price of Drops decreases to $0.50: The user would receive $3,000 -> 6,000 Drops. The user’s total drop balance is re-deposited into Dex, with a total portfolio value of $53,000 (106,000 *$0.50). In this scenario, the user has a smaller net worth, but a higher overall Drop balance which means they will benefit more from future price increases.
How profit is shown
Whenever a position closes, and profit or loss is realized, that amount is added to or subtracted from pool’s total. A customer’s percentage owed of ‘pool total changes’ are then reflected in real time in relation to their current available net return in the user portal.
That’s why in the portal it shows that a certain percentage each day is made every 15 days. The amount displayed in the dashboard is your percentage cut from your selected risk pool.
Difference between automatic cashout and recontribution
Automatic cashout feature allows you to cash out your Dex earnings to the portal wallet or an external wallet of your choice. You can also do both by specifying a portion to cash out and a portion to recontribute. If you wish to leverage compounding returns we recommend not doing a cashout after each period but instead do it annually / quarterly.
When recontribute is enabled, the profit from your Dex cycle will be automatically redeposited back into Dex, and you will benefit from compounding returns.