Intro
The overtaking of Solana and Cardano in market cap has put $LUNA in the spotlight.
With LUNA/BTC being at its all-time high, let’s talk about $LUNA for a bit.
Specifically about why it is an amazing hold and how can we maximise our gains through yield farming.
LUNA Dominance
Firstly, $UST is the most regulation-resistant stable coin.
- $UST is algorithmically pegged to US dollar and not backed by fiat USD like most other stable coins.
Secondly, it is resistant to bear market cycles due to its deflationary tokenomics.
- Demand for stablecoins including $UST increases in the bear market. This increases the value of $LUNA as $LUNA is burned to mint more $UST.
23.34% APY On LUNA?
Now let’s take a quick look into one of my favourite DeFi strategies recently.
One that allows you to be fully exposed to the $LUNA price action with no impermanent loss while being eligible for airdrops in the Terra ecosystem.
Instructions
- Liquid stake 50% of your $LUNA in Staderlabs to get an equivalent amount of $LunaX. (8.69%)
- Provide the LunaX and the remaining 50% of your $LUNA via the LunaX-LUNA Liquidity Pool on Loop Markets. (14.65%) https://dex.loop.markets/farm2
- Go to ‘Farm’ and stake the LP tokens you received for providing liquidity.
- Monitor %APR and adjust accordingly.
- What this means is that if there is another strategy with better returns in similar no-risk environments, we can consider withdrawing and moving there with our funds.
Yield Farming
So what’s the point of yield farming and why do I think it’s an essential skill to learn?
Especially during bearish cycles such as the one we just had, yield farming allows us to hodl and accumulate with peace of mind.
Unless you intend to flip your assets and sell for a quick profit, why not put it to work and get that extra profit?
Final Thoughts
As usual, this post is not meant to be taken as financial advice even though I am licensed as a financial advisor in the real world. It is just a quick post to share this opportunity that I saw. Just wanted to come back to the financial side of things after posting two posts on blockchain games.
I am personally bullish on Terra as I am in Hive and many other ecosystems. That does not mean that I intend to convince anyone to feel the same. Always do your own research and due diligence.
Looking forward to feedback or criticisms. If you have any, I am all ears. :D
Until next time!