Good morning Lions I trust you are safe and well I know I am starting to feel a little edgy with the current bull and some unprecedented all time highs. BNB is definitely one of the winners in the current market and I would put Luna in that same bucket but there appears to be a bit of a battle around price on Luna at current.
In today's post I would like to introduce you to Lighthouse Defi which was formally known as Harpoon Protocol which is a liquidation protocol on the Terra Network that enables bidders to buy discounted Terra in the event of a dip and a borrowers bLuna's LTV drops below 60%.
What is Liquidation?
A common feature that arose on Compound and AAVE was the ability to borrow against the value of your digital asset by providing collateral which brought a new way to engage with the Cryptocurrency sector. With previous iterations solely focused on buying and holding awaiting for a price increase.
So users were presented with the ability to deposit their asset say Bitcoin and then borrow another token at a set value. This enabled investors to leverage their positions and if a token they borrowed price increased they would turn a profit.
However, what also occurs are liquidations as most seasoned investors are aware Cryptocurrency is quite a volatile market and when your tokens deposited collateral declined below your agreed LTV a liquidator would be able to purchase your token at a discounted rate as the system would continue to sell your collateral to maintain your LTV. Borrowers don't lose all their collateral or asset just the value it needs to maintain the LTV.
Anchor Protocol
Anchor Protocol on the Terra (Luna) Network offers this service where borrowers can deposit bETH or bLuna (a minted asset) to borrow against which are impacted by liquidations.
One thing I have always wondered is where I can participate in purchasing discounted tokens that are being liquidated, although it is readily known that this form of trading is automated with mainly bots operating. Where I still don't know where or how I can tell you that Lighthouse Defi is currently building a project that will enable ease of access for retail investors to participate in bidding using Pools.
Lighthouse Takes on the Bots
Effectively what Lighthouse is trying to develop is a protocol where users can enter UST pools of their desired rate and wait for liquidations to occur and once one does come up the protocol will spring into action claiming the liquidated asset and sharing it amongst the people in the pool effectively providing cheap Ethereum and Luna as the protocol will be assigned to Anchor.
It is yet to be known if a bot can be beaten as most the successes are done by competing bots putting in offers in a type of auction approach. It sounds like a wonderful project that will provide retail investors with another avenue to engage Decentralised Finance but as the project is still in development it is yet to be seen if it can beat the speed of a bot created to solely win auctions.
You can read more about Lighthouse Defi and keep up to date on development on their medium account here
You can also find them on twitter here
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