New Player, What to do? Gardens vs. Heroes vs. Jeweler (f/k/a Bank)
Nothing in this article is intended to be financial advice and is strictly for informational purposes.
Updated Feb. 21, 2022 to reflect the in game name change of the “Bank” to the “Jeweler”.
New Player, What Do?
There’s a little overlap here with my comprehensive unofficial beginner’s guide — but if you’ve set up your DFK account and are just looking for some high level guide posts. I hope this article can give you some guidance.
Gardens vs. Heroes vs. Jeweler (f/k/a Bank)
So you’re a new player, and you’ve brought a little or a lot of Harmony ONE token into DeFi Kingdoms and purchased some $JEWEL, maybe you followed my unofficial beginner’s guide. What do you do? Do you buy a hero right away? Do you invest it all into a garden, or gardens? Do you stack it in the Jeweler? Let’s take a look, because each offers unique benefits, and each has unique risks. This is not financial advice and you should always do your own research.
The bad news: there is no quick and easy answer and there is no one size fits all.
The good news: there are answers, if you can figure out what you’re looking for.
Gardens
The gardens are Defi Kingdoms’ liquidity pools. You can read up on what those specifically do elsewhere, but basically you pair two tokens, for example JEWEL and ONE and create an LP (Liquidity Pool) token, and “plant” the LP token in the gardens. Each garden pairing will offer a different APR, which you can check at the Seedbox in the garden. The returns for all gardens come in the form of $JEWEL tokens.
Gardens usually offer, at face value, higher return than Heroes and the Jeweler. However, unlike Heroes and the Jeweler, you are subject to different risks.
First, when you are in a liquidity pool, any liquidity pool, you may be subject to something called impermanent loss. It essentially means that if you hold two tokens, like JEWEL and ONE, and the ratio between the two tokens (since the time you made the LP token) changes (i.e. one goes up and the other stays the same or they move in opposite directions), you could potentially have more value simply holding JEWEL and ONE rather than having them in a liquidity pool. You still will realize an increase in value of your Jewel underlying the LP token, just not as much as though you held the $Jewel separately. The same goes true if the value falls, you will lose a bit more than you would simply holding the tokens, if you are a liquidity provider. https://dailydefi.org/tools/impermanent-loss-calculator/ offers a great calculator so you can play around with numbers and see what it means when tokens change in value. To offset this, the gardens offer high APRs, but the APRs are variable and can change quickly.
Gardens are a decent option if you are bullish on one or both tokens that you pair to plant in your garden and don’t mind waiting a while to get some of your returns.
For example if you think that 1SUPERBIRD, which as of the time of this article has an APR of 847%, is going to have a sharp decrease in value, it still may not be worth it. The higher APR gardens are JEWEL pairings, so at the least you would want to be bullish on the token you pair with JEWEL if you choose to plant that pairing in the garden because you can’t easily unstake, unpair and sell that underlying token quickly and without fees.
In the Gardens, some percentage of your earnings are locked (at the time of this writing, 67% of a reward CLAIMED (its not locked until you claim it) from a garden is locked, with 33% of the CLAIMED Jewel being harvestable and usable). The locked rewards begin unlocking around Q3 2022 depending on Harmony block speeds, and they unlock linearly. Withdrawing from gardens can also be costly if you do it too quickly–the lowest fees on withdrawing from a garden occur after 4 weeks.
One thing to consider with gardens is that if you are planning to do Gardening or Mining professions, you’ll want to have some tokens paired into LP tokens and staked in the Gardens because: (1) if you want to earn Jewel from Gardening profession quests, you have to send your gardener hero to a liquidity pool where you have money staked, if you don’t have money staked in any garden, you can send your gardener to any liquidity pool for the quest, but they won’t be able to earn Jewel from the quest pool, instead you’ll be limited to items (herbs, runes, eggs, etc); and (2) for you to be able to earn Jewel from the locked Jewel mine, you need to have locked Jewel, and there is no way to get locked Jewel without claiming Garden rewards. So if you have no LP staked or haven’t had any LP tokens staked where you claimed some rewards — then you will bar yourself from being able to earn unlocked Jewel from gardening and mining profession quests.
The Gardens can be a great way to get your feet wet and earn some Jewel while you are learning more about game mechanics and to farm enough to buy or summon your first hero.
Heroes
Heroes are NFTs that will perform a variety of functions in Defi Kingdoms. However, as of the time of this writing, they can perform only two functions: questing and summoning. The ROI on questing at with the worst drop rates isn’t very close to the ROI of Gardens or the Jeweler unless you get lucky and summon a high rarity card or pull a rare item like runes or, if you are really lucky, a pet egg. The ROI of summoning is subject to market whims, news of what heroes can and will do, and how many summons your hero has left. The Hero NFTs are speculative. As they add more features and things for heroes to do, we will probably see an increase in ROI and in value of the Hero NFTs themselves. There is massive upside potential with the Hero NFTs, but also a lot more risk than the stable rewards provided by the Jeweler or the Gardens.
Heroes are a good option if you are bullish on the project as a whole, want to participate in the “game” elements of Defi Kingdoms as they come out, and you want to speculate on future earning potentials of heroes. Maximum efficient use of heroes currently requires interaction with Defi Kingdoms about 3 times a day.
Heroes, when questing, can gather items that are potentially rare and valuable. However, these items, such as pet eggs and runes, have low droprates (the droprate on the Shvas rune, needed to level, is 0.2%. The droprate of a pet egg is 0.01%). I recommend not relying on “hitting it big” with these. Summoning carries a lot of upside if you pull a high rarity advanced card, but also a fair amount of downside if you pull a low quality common hero.
The Jeweler
The Jeweler stores JEWEL, and has no withdrawal fees, unlike the Gardens. It requires no pairing to other tokens, which means you can be bullish or even flat on JEWEL as a token and still see returns. The APRs of the Jeweler are much lower than the APRs in the garden, however. They are variable, day by day. You can see how much they can differ day by day here: https://kingdom.watch/bank.
Another key difference of the Jeweler vs. the Garden is that the Jeweler’s rewards are fully unlocked, immediately. You don’t need to harvest them, you can simply deposit JEWEL into the Jeweler and your JEWEL amount will increase over time.
Jeweler, then, is a good option if you are bullish specifically on JEWEL and Defi Kingdoms and don’t want to deal with the potential impermanent loss of Gardens, and don’t want to deal with locked rewards.
A fringe benefit of using the Jeweler is that Defi Kingdoms has offered airdrops and raffles for those who have a certain amount deposited in the Jeweler, and they may again in the future. This is not a benefit that is realized in the Gardens as those Jewel paired with other tokens to form LP tokens and then staked in the Gardens have not qualified for any airdrops (and likely will never qualify).
Too Long, Didn’t Read:
Gardens are good for people wanting higher returns with potential for impermanent loss, with locked rewards for the future. Withdrawal fees are high if you change your mind quickly.
Heroes are good for people wanting to participate in game elements as they come out and speculate on the earnings potential and future value of NFTs in the Defi Kingdoms system, and want to be involved at least daily. They also provide some massive upside if you are lucky (think of drawing a really rare card from a booster pack), but also the most potential downside.
Jeweler are good for people who do not want to deal with liquidity pairings/impermanent loss, harvesting, or locked rewards, but who are bullish on JEWEL. The rewards are less than gardens, but stable.
The End
The choice of what to get involved with when you’re new is more about you which is why there’s no one right answer. It depends on your belief in various tokens, Defi Kingdoms as a whole, and what you want to do in the game. Don’t forget, you’re of course not limited to just one option. With some capital, you can be involved in Gardens, Heroes, and Jeweler.
