Kingdom of Knuffel

Recap:

Rate of return is in the negatives through level 19.
At level 20: 0.10081
At level 21: 0.13711
At level 22: 0.16646
At level 23: 0.19033
At level 24: 0.20964
At level 25: 0.22537
At level 26: 0.23802
At level 27: 0.24828
At level 28: 0.25641
At level 29: 0.26291
At level 30: 0.49118

4784xp to level 31
Gain is 3k + 3.1k = 6.1k
Cost is 3.8k
Profit is 2.3k

2.3k/4784 = rate of return of 0.48077

(Note that for the first time, this is LESS than the level before it. I'm going to calculate up to level 40 though because that'll jump the profits by another 1k, so just in case.
But for now, indications are that it becomes less efficient to continuing a knuffel past level 30 if all you're doing is giving it up for adoption and readopting it again; it becomes more efficient to start over with another knuffel.)

I might have to redo these with only a single-time cost of a knuffel (1.9k instead of 3.8k, which assumes you give it up and DON'T readopt it) to see if that changes things.

Recap:

Rate of return is in the negatives through level 19.
At level 20: 0.10081
At level 21: 0.13711
At level 22: 0.16646
At level 23: 0.19033
At level 24: 0.20964
At level 25: 0.22537
At level 26: 0.23802
At level 27: 0.24828
At level 28: 0.25641
At level 29: 0.26291
At level 30: 0.49118 *** (best yet)
At level 31: 0.48077

5098 xp to lvl 32
Gain is 3k + 3.2k = 6.2k
Cost is 3.8k
Profit is 2.4k

2400/5098 = rate of return of 0.47077

Recap:

Rate of return is in the negatives through level 19.
At level 20: 0.10081
At level 21: 0.13711
At level 22: 0.16646
At level 23: 0.19033
At level 24: 0.20964
At level 25: 0.22537
At level 26: 0.23802
At level 27: 0.24828
At level 28: 0.25641
At level 29: 0.26291
At level 30: 0.49118 *** (best so far)
At level 31: 0.48077
At level 32: 0.47077

5423xp to level 33.
Gain is 3k + 3.3k = 6.3k
Cost is 3.8k
Profit is 2.5k

2500/5423 is a rate of return of 0.46100

Recap:

Rate of return is in the negatives through level 19.
At level 20: 0.10081
At level 21: 0.13711
At level 22: 0.16646
At level 23: 0.19033
At level 24: 0.20964
At level 25: 0.22537
At level 26: 0.23802
At level 27: 0.24828
At level 28: 0.25641
At level 29: 0.26291
At level 30: 0.49118 *** (best so far)
At level 31: 0.48077
At level 32: 0.47077
At level 33: 0.46100

5758xp to level 34
Gain is 3k + 3.4k = 6.4k
Cost is 3.8k
Profit is 2.6k

2600/5758 = 0.45155

Recap:

Rate of return is in the negatives through level 19.
At level 20: 0.10081
At level 21: 0.13711
At level 22: 0.16646
At level 23: 0.19033
At level 24: 0.20964
At level 25: 0.22537
At level 26: 0.23802
At level 27: 0.24828
At level 28: 0.25641
At level 29: 0.26291
At level 30: 0.49118 *** (best so far)
At level 31: 0.48077
At level 32: 0.47077
At level 33: 0.46100
At level 34: 0.45155

to level 35 the xp cost is 6102

After levelling it up and giving it up for readoption, the gain is
3k + 3.5k = 6.5k
The cost is 3.8k
The profit is 2.7k

2700/6102 = rate of return: 0.44248