One of the main reasons that got me interested in the Terra ecosystem is the Anchor Protocol offering close to 20% APY in their stable token UST. Now as I dived into more of the ecosystem I believe I have uncovered a hidden gem that not many are talking about.
Once you purchase some Luna there are multiple ways to earn passive income. The most well known way to earn is staking the Luna on the ecosystem's main wallet, Terra Station. The average APR is around 7% when you delegate it to a validator and they stake your Luna.
What is interesting with this form of staking is the user is earning its APR on air drops as well as Luna. That is certain terra protocols will provide airdrops of their native token to all users who stake Luna toward the ecosystem.
Some of the past and present tokens that have been airdropped for Luna stake holders are shown above. The longer you stake your Luna the more airdrops you will receive. There are over 100 Terra protocols coming out in 2022 and some will potentially be providing airdrops too.
Terraswap
Now stopping with the tangents I would like us to look at swaps on Terra. Specifically Terraswap.io For those aware swap pools are lucrative when rewards earned from swaps are plentiful. On Terraswap it maybe so for the bLuna : Luna pair.
Based on https://alpac4.com/terraswapdashboard/ currently if you provide liquidity for the bLuna and Luna pair you will be earning close to 25% APR. The rewards are basically in bLuna and Luna as you are collection the fees from partaking in the pool. Amazing isn't!
One may notice that the Luna : UST pair pool is over 100% and why I wouldn't recommend it? If assuming Luna could potentially go a lot higher the UST earned from this pool may not cover the pace of Luna rapid rise in value. Just look at 2021 where Luna went from $1 all the way to over $100! Hence I would only recommend using the pair if you assume Luna prices are where they will be in the future.
The focus here is that bLuna and Luna is providing you over 25% per a year in Luna for almost no risk is simply too hard to ignore. The fact that APRs are not listed on Terraswap is something hidden from general public hence I would believe this sort of yield will remain stable for some time.
None of what I write is financial advice. It is for entertainment purposes only. Thanks for reading!
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