Terra is confirming itself as the ecosystem to watch, with Luna showing insane strength in spite of some serious Fear, Uncertainty and Doubt (FUD), and arguably the worst market sentiment since the covid-19 pandemic began.
While many leading altcoins are down 50%, 60%, or even 70% from their all-time highs (ATHs), Luna is less than 30% down. And it is showing every sign of chasing the $100 dollar level once more.
Further, the total market capitalization is down 43% from its ATH on November 10th2021, while Luna is up 46% over the same period.
Source: tradingview.com
Do Kwon has created an ecosystem that, so far, appears to be highly resilient against bear trends. In spite of the FUD, global uncertainty, and the distinct possibility of further downside across the board, Ran is confident that Luna will continue to prove itself the toughest kid in the playground:
Why is Luna performing so well?
Luna’s impressive rebound came following the Luna Foundation Guard’s (LFG) $1 billion dollar bitcoin raise, intended to be a reserve that can act as a “release valve” for UST redemptions during selloffs in crypto markets.
Follow the smart money, as we often say.
In this case, the LFG raise was backed by some of the smartest money around, including Jump Crypto, Three Arrows Capital, Republic Capital, GSR, Tribe Capital, DeFiance Capital and others – each of them adding serious muscle to the UST arsenal.
On top of that, Luna is burnt every time UST is minted. So, a supply shock could be on the horizon, which could easily send Luna on to chase the highs in the near future.
Risk-on safe haven
In the meanwhile, UST continues to show its strength as a risk-on safe haven. Rather than putting their profits (or losses) into fiat, investors are increasingly choosing UST and Terra yield-bearing protocols, providing them with healthy 20% yields.
As the market conditions deteriorate, the UST market capitalization is showing relative strength and is about to hit $13 billion.
Quite simply, with these yields, why would you bother withdrawing to your bank account?
You have the added protection that when the market does turn, you have quick access to your funds to deploy when you believe the timing is right.
Ecosystem set to follow?
The success of Anchor has been carrying the Terra ecosystem, but here are some of the top protocols we’re keeping our eyes on.
Astroport
This decentralized exchange (DEX) was built by a team of world-class developers, and incubated by Delphi Digital and IDEO CoLab Ventures. They have worked in close collaboration with Terraform Labs to completely reimagine Terra’s leading automated market maker (AMM)
Check out this phenomenal thread about Anchor’s token distribution (and why it’s getting healthier with age).
With an all-time high of $2.00, ASTRO has been showing tremendous strength, as Astroport soared to over $1 billion in total value locked (TVL) and a very healthy mcap/tvl of 0.10478.
https://www.coingecko.com/en/coins/astroport
Crucially, it launched at 2$. And if you know anything about VCs, you’ll know Delphi Digital will do whatever they can to make sure prices chase (and surpass!) those previous highs again. You heard it here first!
Mars Protocol
The Mars Protocol is upon us.
Instead of venture capital, they have used what they like to think of as “joint venture capital”, referring to the teams who built Mars collaboratively to see it succeed.
As their article puts is:
“When Mars launches, users of diverse stripes — traders, liquidity provides, and other protocol teams — will rapidly join in this joint venture and we will all collectively determine the future of Mars together — no contracts, no investors, no managers, just an open free association of persons empowered to autonomously use, meme and govern what we think will be the dopest credit protocol on the scene.”
As Mars enters phase 2, users need to “lock up” UST for a fixed duration of up to 18 months. In exchange, they will receive a “drop” of MARS tokens which can be claimed as soon as Mars Protocol launches. The more UST (and the longer the lock up), the more MARS tokens you receive.
https://lockdrop.marsprotocol.io/#/launch
Kujira
Become a killer whale and beat the whales and bots at their own game: not only can you stake KUJI governance tokens to save on fees, but you can also place liquidation bids and select the premium discount you’d like to receive.
As liquidations occur, Kujira starts at the lowest premiums and works its way up. So, the higher the premium, the longer you wait.
No need to get despondent while waiting either: when large-scale liquidations occur, users get the liquidated bLUNA at a healthy discount.
Levana
Levana stands for “LEVerage ANy Asset”. The protocol was incubated by the almighty Delphi Labs.
It’s a gamified decentralized finance (DeFi) protocol that includes a rich world of adventure, designed to bring the next 100 million users to crypto from the world of Web2.
Levana is also a role-playing game, a video game, a non-fungible token (NFT) collection game, and a new token economic model called DeFi-tainment
The Levana adventure takes place 500 years in the future (on Mars) during the planet’s second civil war. Users represent humanity’s last chance for survival. Your mission is to choose a Faction and help your team in a battle for the planet.
https://factions.levana.finance/
Once you receive a ‘Styller Talisman’ representing your chosen faction, you can:
- Stake it in the Faction War website.
- Trade it on Knowhere.Art or RandomEarth.io for a different faction Talisman.
- Use it to play Salim’s Adventure.
- Keep it in your wallet and do nothing (for now).
With multiple farming opportunities, leverage trading strategies, perpetual swaps on Terra with up to 10x leverage on long or short positions, picking a faction and making DeFi fun has never been easier.
This deep-dive thread from @1xvk_on Levana is a must read!
White Whale
Become a LUNATIC and help to keep the UST peg via Layer-1 seigniorage arbitrage, as well as participating in other complex automated trading strategies.
Currently only supporting Terra, but will soon support Solana and Cosmos.
With its aim to provide delta neutral profits and increase demand for UST, you get to deposit tokens represented by vault tokens (vUST, vLUNA, …). These tokens are redeemable for the initial deposit along with its accrued interest, making these tokens auto-compounding.
White Whale vaults are structured to provide depositors with:
- High, stable deposit yields powered by the Anchor Protocol.
- Arbitrage Exposure through White Whale arbitrage of stablecoin deposits.
With a current price of $6.40, but a recent high December high of $20, this is a protocol to keep on your watch list.
With $31 million in TVL, a juicy 20% annual percentage rate (APR) on UST staking and a juicier 29.85% APR on staking WHALE (the governance token), combined with the auto-compounding nature of vUST, make this a no-brainer for DeFi junkies.
Source: https://www.coingecko.com/en/coins/whale
Banter’s take
Luna is defying market uncertainty and showing insane relative strength. One has to wonder what the resumption of a full bull trend will do for Luna and the Terra ecosystem. Where Anchor Protocol had carried so much of the TVL this past year, the arrival of a range of high-caliber, new protocols is going to give some much needed relief: after all, no matter how incredible Anchor and its high yields are, no ecosystem can rely on one single protocol. A diversified ecosystem is only going to make Terra even more formidable.
