
My last article was fun. First time I’ve done analysis of a gaming token. I apologize for delay in posting my next article. I’ve sat on this for a while and what I wrote back in September is still true. I’ll add some further updates since two months is a long time in Crypto. This month I’m going to delve into something that’s closer to my overall “banking” experience. Elephant Money.
Elephant money is a very interesting DeFI project in the crypto space. In the following text I’m going to go over what I know of the project and highlight the risks and possible potential. As always this is not financial advice. I’m providing a service of my thoughts and insight to add to you the reader’s due diligence and research. I hope you read many more articles than my humble post as you take it all in. As with all DEFI. Do not invest what you are not willing to completely lose. Do your own research (DYOR).
Full disclosure. I do hold a position in Trunk. Not going to say how much of course but I am a holder of Trunk and generally follow along in their threads and community. The community refers to itself as the HERD.
What is Trunk?
Trunk is a DEFI project headed up by a community of people that has been going on for seven years or so. The project was developed on the Binance blockchain and recently partially migrated to Solana. Currently it exists on Binance and Solana but the future focus is on Solana. The project has gone through an evolutionary period over the seven years to mature to what is now a DEFI project based on a capped token (TRUNK) which has a Futures component built into the ecosystem.
The basis of the project is a limited supply of TRUNK and an annuity/futures tool that locks TRUNK into long holding hands. Thus making it scarcer and scarcer overtime. Similar to Bitcoin the MATH should make the token continue to go up in price as long as there is consistent or increasing demand. Keep this thought in mind, “consistent demand”. We’ll discuss more later in the risk section of the post.
The project has had challenges. An attack on the smart contract several years ago. Now mitigated by outside auditing of the contract. A liquidation attack on the Save.finance TRUNK/USDC lending pool. I’ll cover more on save.finance in my next article. Once again this was a learning exercise for the HERD as they have fallen down and gotten back up from their challenges and honed their engine. The initial pool was set with very aggressive LTV’s which made the pool suspect to rapid liquidation causing an aggressive price drop and sell-off. While this did happen in July just before the Nashville Bitcoin conference the project keeps picking itself back up.
| Trunk Price in Solana. Floor around .25. | Gecko Terminal
The attack is pretty plain to see on this chart. What I would like to point to is the upward trend shortly after the attack. The current downward trend is the air going out of the leverage bubble that was created by Save.finance. The air continued to go out of the bubble from September to November. With the latest move to basing futures on NFTs that can be traded air is starting to go back in. Once again DYOR. One theme I see again and again in crypto is that many projects (Bitcoin included) have significant volatility because there are only a few actors. In Trunk’s case very little amount of money moved the September curve down to the floor. It will take very little money to move the curve in the other direction. Before we dive into that let’s talk about Ponzi schemes.
Elephant Money is Not a Ponzi Scheme
If you troll the Internet, Discord, Telegram and so forth many projects including Elephant come up as a Ponzi scheme. I’m going to refer to this Wiki article on Ponzi scheme’s and then formulate my definition. Here it is:
”A Ponzi scheme is where money comes in and all the money is paid to prior investors. The money's gone and there are no assets owned by incoming investors.”
Trunk is an audited smart contract. When you put money into the Future’s or purchase Trunk you possess something. You possess the Trunk token which is on either the BNB or Solana chain. It’s not gone. The Futures liabilities and payout is generated by an appreciating Trunk token. Trunk works when the price of Trunk goes up either by increasing demand or shrinking supply. Just like Bitcoin. Unless you think Bitcoin is a Ponzi scheme I suggest you stop reading this article and probably divest out of crypto. All Crypto needs incoming cash flow. Shitcoins, Stable Coins, Proof of Work coins and Proof of Stake coins all need incoming cash flow. If folks stop buying Trunk and the price goes down the Treasury will struggle to pay its liabilities. It’s about cash flow.
Why I think Trunk is a good project is the community around it and its constant commitment to DCAing over time into the Trunk Token. Combined with the lock up of Future’s and the continuous strong hands holding Trunk the MATH overtime just works. Constant or increasing demand and constant or shrinking supply is a great formula.
I’ve been digging into this project over a few months and I have some more insight into why I think this project is very undervalued. Let’s dig.
The HERD is made up of several individuals who form a core of the group. They are all DCA’ing into the project overtime. In July just after the liquidity attack I was able to attend the Elephant Rooftop Party in Nashville at the Bitcoin 2024 conference. My wife and I had a great evening and got to talk to a lot of folks in the HERD. Both old and new members. As in all things crypto the group was definitely made up of a lot of people disenchanted with the current banking system. They are all very much into the project and the community. All of them had the advice to not put your life savings into Elephant Money. Be a responsible investor and do your own research. Many of them took a lot of time to explain the project in detail and were very open about the project. Overall a lot of honesty from a very committed group.
Looking at both sides of the coin.
The project hinges on its founder and primary developer. BankTeller (BT). BT is a very open person and very committed to the community. If you DYOR you can find his real name. He doesn’t hide it. BT’s resume is impressive. MIT graduate, Fidelity, Bitcoin and other early DEFI projects. He’s been in the space and has both a strong network in DEFI as well as investment and individual investors.
Risks
As with any great opportunity there are always risks. One potential risk which is also a great advantage: a lot of the project runs on BT. He definitely makes the HERD and the project go. He is also a singular risk if “god forbid” something were to happen to him. The governance body (Savana Haus) has been working with a legal team to create a sustainable organization since they have recognized this risk. BT’s presence though is still a risk and a great asset at the same time.
Elephant Money used SAVE.finance to highly leverage Trunk in early 2024. In July Trunk experienced a sell off which triggered liquidation in SAVE. Which piled more gas on the fire and caused a crash. After rebuilding and using Savannah House to unlock the pool so everyone could be made whole Savannah House restructured the pool and locked out third party liquidators. As Trunk continued to fall through the third quarter 2024 the pool became locked. Leverage can be a great tool but also a two edged sword. However locking up liquidation to make the leverage one sided can contribute to a bank fail. Or in this case a “pool fail”. The project will come back from this event but it will take time. Right now I would say you are looking at a very discounted asset that could go up significantly in a two year time frame. IMHO. But do your own research. There is a lot of risk in these waters. As of this writing (November 2024) Elephant is still recovering and paying off the debt but the pool in Save is still locked. Folks are earning a decent APY (8%) but the funds are locked until borrowings are repaid. I’m working on an article on DEFI lending sites which I will post in a month or two.
Leveraging risk caused a great upswing in Trunk but also lead to a significant drop in price due to save.finance leverage.
Recently at Investfest 2024 in Atlanta BT led a bunch of HERD members and had a booth in a central location at the conference. Some deals did come but the price of Trunk continued to slide. In October 2024 Elephant Money started to focus on partner projects and used the HERD to pump smaller projects which were tied to Elephant Money via Liquidity Pools. While I am not in the inner circle of the HERD the age of the project in DEFI, the overall commitment of the group and the potential network inflow has me believing this is a great opportunity and is seriously undervalued. Elephant Money overall is a small project. Like many DEFI projects it takes very little money to swing things in either direction.
In November 2024 the project shifted to NFTs as a representative of futures. The HERD continues to fill the Elephant Telegram channel with chatter as Trunk continues is rise back from it’s lows. Looking at the prior chart I use that as a gauge of where the token could possibly be if all the other challenges are removed and mitigated.
I’m pretty sure if these challenges are removed the HERD will use DEFI once again to create a rocket to the moon. NFT’s are helping move the rocket to the launch pad.
Stay tuned.