Animal Farm — Pig Pen Introduction — A great profit opportunity?

4 min readOct 16, 2022

Animal Farm article overview

After yesterdays high-level overview of the Animal Farm (Article here), lets have a closer look at the PigPen today. We remember that PIGS or the AFP token is the governance token of the Animal Farm. If you own PIGS, you own part of the Animal Farm and with that you are participating as an owner and get regular dividends in form of PIGS and BUSD. But lets start from the beginning.

Vesting mechanics

PIGS staked in the PigPen represent a share ownership of the Animal Farm platform. And as you are an owner you will earn a part of all the platform fees and the right to vote on the future of the platform. Similar as to owning shares of a company in the traditional world.

To keep the long-term benefit of the platform in mind, a vesting period of 50 days was implemented. This vesting period has not been implemented they way you might think: You cannot sell your PIGS within these 50 days. Nope, it got implemented much smarter in my opinion: You can sell only 2% of your PIGS per day. So at the end you would need 50 days to sell 100% of your PIGS.

Dividend sources

So where does the money for the dividends for the PIGS owners come from? As partial owner of the platform you profit from all the fees paid by the users. This includes deposits and withdrawals of the Liquidity Farms and Pools, taxes from DOGS transactions and fees and yield earned from the Piggy Bank.

In detail, the BUSD dividend comes from

- 1/3 of all taxes paid on DOGS transactions
- 75% of all non-native farms and pools deposit and withdrawal fee
- 30% of yield generated through our collateral re-hypothecation lending model

For the PIGS (AFP) the dividends are gained from

- The AFP part of the deposit/withdrawal fees on unpaired AFP/BUSD LP from the Piggy Bank

Developer ownership

How much do the developers own of the platform? This is always a good question to ask: There is a hard coded 10% lock within the contract to limit the devs ownership. The devs can also not withdraw there deposited PIGS and can only claim the earned dividends.

The BUSD part of the deposit and withdrawal fees on unpaired AFP and BUSD LP (Liquidity Pair) from the Piggy Bank are used for development and marketing fees.

Rewards — How much to profit?

Probably the most interesting part of the article: How much can you earn by staking PIGS? You will earn rewards based on your ownership percentage (obviously).

- BUSD rewards are 3% per day of the Total Vault balance for that 24hr period
- PIGS (AFP) rewards 3% per day of the Total Vault balance for that 24hr period

Quite an interesting investment in my personal opinion.

PIGS and DOGS are getting burned

There is also a burn mechanism implemented in the protocol for PIGS and DOGS, otherwise these wouldn’t be deflationary tokens as stated by the developers. For both tokens 3% of the sales tax will be burnt constantly by getting sent to a 0x000 address. Lets see how that impacts the price over time…..

PIGS Tax

Last paragraph of this article, but an important one. How are taxes structured for the PIGS token:

If you buy and transfer AFP tokens to another address, there is no tax at all. Only if you sell your PIGS you will pay a 3% tax.

There are no taxes on any of the PigPen activities.

On the Liquidity Farms you pay only a 3% tax if you use an external DEX (except Pancake Swap). You will also pay 3% if you sell your PIGS there. So just use the Animal Farm and you are fine.

With that we conclude our article on the PigPen. Any questions or feedback? Always welcome. Many thanks for your time.