LeoFinance - Terra Ease of Leverage Makes It Great

in LeoFinance2 years ago (edited)


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Terra blockchain's unique leveraging comes from collaboration of multiple protocols. Today we take a look at another one that uses Anchor's aUST to earn additional income. While we look into option to earn additional income we will look at how two protocols working together on Terra can increase so much gains for its investors.

Anchor Protocol's aUST

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When I invest in Anchor's 19.5% APR stable coin UST I am actually selling my UST to purchase aUST. aUST is Anchor's token that increases in value of approximately 19.5% APR a year. The protocol began in March 2021 and to date it is traded at a rate of 1.174 UST per each 1 aUST. The value of aUST to UST will appreciate and can easily be sold on Anchor back to UST.

In addition there are protocols that Anchor has collaborated with to introduce other uses of aUST beyond just having aUST price appreciate. One of those collaboration is with loop.finance.

Loop Finance

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Loop is mainly a Terra decentralized exchange with a native token called LOOP. It provides liquidity pools for investors to swap between pair assets across multiple Terra tokens. In addition the platform has NFT trading, and community blogging to earn LOOPr tokens. Liquidity on the platform has risen recent and is close to $80 million TVL.

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Anchor collaborated with LOOP to create some pools with aUST token.

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By providing aUST with another token and participating in the LOOP pool I will earn LOOP interest daily and a portion of the fees on the exchange. What makes this amazing is that the aUST is still collecting 19.5% APR on Anchor!

Conclusions

What we are common to see in staking cryptocurrency is that we lock up our assets to earn rewards. What smart contracts allows is the ability to branch off from the limitations of staking. What we can do with the lock assets on Terra is amazing.

The locked up UST on Anchor provides me aUST. I can apply aUST to liquidity pool to earn rewards such as LOOP token. I can provide LOOP token back into LOOP : aUST liquidity pool creating even more rewards. The basis of earning rewards and investing the same principal multiple times on Terra is only feasible do to the multiple collaborations with developers on the platform. The collaboration between the protocols enhances users' experience on the blockchain by allowing users to earn higher amount of rewards. To end this post lets take a look where LOOP token can be earn beyond the LOOP protocol. ;)

On Pylon protocol LOOP has created a initiative to earn LOOP tokens if investors lock up UST for a specific amount of time. The longer the lock up the more LOOP tokens earned. At the end of the lockup the investor gets back all their UST but in addition have LOOP tokens work using for what ever use they please. This is another example of collaborative spirit on Terra. LOOP and Pylon working together.

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None of what I write is financial advice. It is for entertainment purposes only. Thanks for reading!



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Those are really nice APRs. There is so much opportunity, and now I think the returns are at the highest level they will ever be.

I am still researching but down the road will post one that I think is very solid. A lot of these pools are confusing at first but once I understood what it mean it became easier to write about. Hopefully in future posts I will be able to show examples on how to use some of these pools.

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