In 2021, I started different DeFi projects with the goal of creating a stream of passive income. I’ve seen different people try out these new projects with crazy high APYs, but I got tired of seeing the same DAO projects. So what I did was look into a different type of DeFi project, and what I found was PACOCA, a multi-chain portfolio manager, automated yield farming and DEX aggregator.
I decided to try out the project since it looked promising, so invested a small amount of money back in November of 2021. And as in the case with PancakeSwap and Wonderland, I was supposed to make a 1 month result video. But here we are catching up to that.
We’re going to look into what PACOCA is, what the features are, and what results did I get after trying it for 3 months.
What is PACOCA?
Paçoca is a sweet portfolio manager where users can track their DeFi assets, invest in smart vaults with compounding yields, and trade tokens at the best rates using the decentralized exchange aggregator.
According to their documentation,
Pacoca was “born to optimize the experience of Defi users, the goal is to provide a broad and centralized view of the assets staked in different DeFi projects in EVM based blockchains like BSC, Ethereum and Polygon.”
And just a side note, the name intrigued me because it was unusual. When I looked it up, the term “Paçoca” is actually a delicious Brazilian peanut sweet, made using ground peanuts, sugar and salt.
Anyway, $PACOCA is the native token for the platform and will have many use cases, short and long term, including: Governance, Auto-compounding vaults, & Portfolio exclusive features.
Initially, the token had a supply cap of 100,000,000, but a proposal was submitted to increase the supply cap to unlimited. That proposal was voted on and passed back in December 2021, and if we’re talking about the token’s price, you guessed it. It has declined since then.
What are the Features of PACOCA?
- DeFi Dashboard — the main purpose of Pacoca is their multi-chain dashboard that tracks multiple platforms in one place. Inside their dashboard, they have a feature that converts your small balances into Pacoca, so you don’t have dust left in your wallets.
- Sweet Vaults — this is basically your typical farming feature. Pacoca has collaborated with Chainlink Keepers to optimize their users’ earnings.
- Exchange — their exchange is powered by 1inch.
Since it is a microcap project, there are features that haven’t been released yet. According to their roadmap, NFTs and a liquidation notification feature are plans they haven’t started yet with the platform.
My Results After 3 Months
When I saw Pacoca for the first time, I liked the idea that I could aggregate any BSC projects that I would get involved with in the future.
At that time, I still had PancakeSwap, which is a popular DeFi platform in the BSC network. Seeing my PancakeSwap investment, alongside Pacoca’s, in one platform was super helpful.
Pacoca is still a microcap project, with a very nice premise to it. I believed that it would be a good project in the long term, so I decided to invest in November 22 last year.
I started with $168.76, and paid $1.01 on fees — 82 cents for swapping BNB to PACOCA and 19 cents for enabling the auto-compounding feature.
$1 in fees for a DeFi project is a really good deal, considering other ETH-based projects have astronomically high gas.
And after 3 months with Pacoca, my $168 investment turned to $56.47 — a loss of 66.54%!
The biggest reason for this decline in value is due to the price drop of PACOCA. At the beginning of my investment, the token’s price was at 25 cents. After putting my position in Pacoca’s Sweet Vaults, the highest price the token would reach was 30 cents. From there, the price has gone down to 4 cents, which is just so tragic. I only experienced a week of profit until my positions declined in value starting December.
So after 3 months, I decided to close my position on February 22, at a token price of 6 cents. At that point, I believed that it wasn’t worth keeping the investment anymore. I’ll just accept the loss and move on.
Final Thoughts & Plan
Like always, there are a couple of lessons I learned and one thing I realized about myself after my experience with Pacoca for 3 months.
- Microcap projects are great for massive gains — This is contradicting with the results that I have here. But let me explain. Being a microcap was another reason I invested in the project. And frankly, this might have been the first time you’ve heard of this project.
Microcap projects are like penny stocks. They usually have market cap of less than $50 million, and they fly under the radar. They don’t do a lot of marketing, so research is where most of the work is. They have the potential for big rewards, especially if you invested during the development stages of the project. If the project proves to be good, you don’t need a sizable position to profit from it. - Timing is key — Cryptocurrency is already volatile, so the risk is high. And with microcap projects, the risk is even more. Since they’re not too popular, information about them may be little and only limited to what the developers put out and a handful of articles online.
If you’re thinking of profiting from the project short term, then timing your investment is essential. For a small investment, you could exponentially grow that as the project continues to show promise and gets attention. Long term, there is no telling how the project would turn out to be. You can do as much research as you can, but that’s it. What the project becomes is still ultimately decided by the developers. - A skewed investing perspective — This is a realization of mine. The expectations for returns in DeFi projects have skewed my perspective of long term investing. People gravitated towards DeFi projects last year because many investors saw massive returns in such a short amount of time.
In paper, that looks great. You see your small investment grow in a year, a month, or even a day because of the high APYs these projects are offering. For new crypto investors, 10% per year looks absolutely cool. You couldn’t get that from the stock market on average.
Then, you move on to discover other DeFi projects that offer 100% per year, and you’re blown away. You start investing, see the returns, and convince yourself that it’s going to be like this in the future.
And finally, you’re not looking anymore at projects that offer returns per year, but they tell you returns per day. 1%, 2%, 5%, and even as high as 10% per day for a DeFi project that just started, suddenly becomes a normal thing to you. You start to dismiss projects that offer returns less than that of your new normal because you believe that these projects will stay in the future.
I could be wrong or right. But that doesn’t matter because fundamentally, your view of cryptocurrency is now a cash grab for the short term, rather than for the long term.
While I have nothing against those who do that, since that’s their business, that type of mindset just doesn’t suit me well at the moment. I really believe in crypto and how it can change the way money works, so I’d still like to have some sort of detachment from profits from time to time.
I like profits and money too, but I just don’t want it to change me. Just like they say, “Make the money, but don’t let the money make you.”
Final Thoughts & Plans
Since I have closed my position in Pacoca, I now have BNB tokens. I’ve looked into staking my BNB instead, so I can make passive income out of it. I found two ways to do it, which is through the Binance website and through Trust Wallet.
I looked into the Binance website first, but found out that they have rebranded binance.org to bnbchain.world. I wasn’t too sure about staking in the new website, despite asking other people about it, so I looked into Trust Wallet.
After going through the process, I couldn’t stake yet since my balance wasn’t enough. I needed a full BNB token in order to start staking, so I’m going to wait for now and add more to my position gradually.