INVESTMENT

Don’t Ever Buy on Uniswap With Less Than $1000

Ethereum gas fees will chew up your purchase

By Hogefather, aka Jesse J Rogers

5/13/2021 Edit: I’ve changed the title to $1000 up from $250 because gas fees have soared so much. There is a way to do this more cheaply now for small amounts. I’ve written about it here. You still have to use Uniswap for large amounts.

As much as I love the HOGE token and the Hoge Finance community, and as much as I want as many people as possible to join the movement, I want it to happen the right way. That’s not necessarily the fastest way. As a crypto daywalker that tutors math in the “real” world, I am deeply pained by some of the decisions my new Hoger family members are making.

I know a lot of people hate math. I get it. But please, please pay attention to what I’m trying to tell you. This matters.

I’ve frequently paid $80 or more on a transaction for HOGE. I tested it once with $200, as discussed in my original article. But when I transact now, I usually make sure to do so with $1000 or more. That means the $80 transaction plus the 2% built-in transaction costs me around $100 off the top, meaning only $900 of value actually makes it into my wallet. I’m losing a total of 10%.

By contrast, I know a lot of you are accustomed to central exchanges. You just throw in $100 into Doge, pay the $2.99 trade fee or whatever it is, shrug your shoulders, gulp your beer, and say “let’s see what happens.” But Americans can’t do that with something like HOGE.

Eventually, HOGE can be purchased on central exchanges in the USA like any other token. Rookies will eventually be able to ape in for small amounts like that without suffering a massive penalty. But not yet. Today, you’re getting in extremely early. The upside is that the price is at a massive discount. The downside is that if you’re using a decentralized exchange, like 71% of Hogers currently do, then buying HOGE with $100 will probably end up providing only maybe $18 or so worth of the token into your account.

By transacting in such small amounts, you’re going to lose around 82% of your value instead of the 10% that I sacrifice.

If you buy that way at the current price of $0.0004-ish, then you’d need more than a 5x increase in price just to get you back to breakeven. I mean, yeah, I believe that will happen. But you’re tossing so much value in the garbage for no reason. Don’t be salty. Be smart.

And if you ignore what I’m saying then don’t for a moment console yourself by imagining that the waste is going to a good cause. It isn’t. Not at all.

The fees are high because Ethereum is still a proof of work (PoW) protocol. The Ethereum team has promised an ETH 2.0 upgrade to proof of stake (PoS), which is more efficient, secure, green, and clean. PoS requires almost no energy to validate transactions. But we aren’t there yet. Right now, the transaction fees are extremely heavy, and they’re going to miners.

Yes, miners serve a vital function for the network and I’m not knocking them. But it is undeniable that they may be pulling energy from people who rely on it to keep their lights on. Moreover, the unintended consequence of PoW is that the incentives are aligned to push miners towards what’s cheap rather than what’s responsible. Crypto critics are right that there do happen to be many rigs around the world that are contributing to the degradation of the environment by using electricity produced by coal and other fossil fuels. Again, this isn’t because miners are bad people. It is because there’s a tragic set of circumstances that led us to a suboptimal place that no one would have wanted, and which isn’t easy for any single person or group (even a government) to instantaneously fix.

The point is, even if the cost to you was the same either way — and it is NOT — it would still be better for the world if you save up and acquire your HOGE in fewer transactions. So be responsible. Dollar-cost-averaging is often a good strategy, but not on Uniswap. If you throw $100 into HOGE every week, you will be far worse off than if you save up each paycheck buying Ethereum on a centralized exchange (which usually doesn’t have to be recorded to the blockchain) and then do a single $1000 transaction to convert the ETH into HOGE every 10 weeks.

The absolute minimum I’d even consider for a HOGE transaction is $250. And I would buy under those circumstances only if dipped back down to maybe 1/3 or 1/4 of its moving average. I already scoured the space between the couch cushions for loose change and bought as much as I possibly could when the HOGE price dropped to $0.00015, so I understand what it is like to work with limited funds, believe me. But again, be smart. Don’t burn 82% of your value for no reason by spending $100. With a $250 transaction, your wallet will receive closer to around $165ish, meaning that you’re still giving up a hefty 33% of your value, but at least you’re keeping the majority of what you put in.

Look, Hoge is a movement for the patient. The artist, writer, musician, entrepreneur — the person who loves pets and invests a lot of time and effort into community building— this is the home for you. But demonstrate that patience before even getting in by saving up to buy in for increments large enough to make it worth your while.

To learn more about what Hoge Finance really is and what it can become, here is the most concise but comprehensive explanation of the project which is available at this time. Be sure to subscribe to my Twitter for more free links to articles and videos.

I have become Hogefather. https://twitter.com/hogefather Soon to be dad. Amateur author. Crypto enthusiast.

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