I would have never expected to tell my mother that I have become a farmer. Neither would she have expected to hear that from her eldest son, who was more into economics and technology. So, what happened? In short: A DeFi summer, Terra Luna, and a strong belief in a more open, decentralized future.
I want to take you on a unique agricultural journey through the Terra Luna ecosystem. First, we will touch upon my beliefs as a Farmer, what a Farmer is and what I learned to become part of the ecosystem. Be prepared for a highly positive take on this new vocation, which is not solely about yield. Then, we will move on to discover the ins and outs of the ecosystem. Finally, I will share with you opportunities and review the risks involved as Farmer.
Indeed, this is only a snapshot in the middle of August 2021. However, shortly after that, the ecosystem will most likely have grown due to the lightspeed of development. Columbus-5 will do his duty, likewise. Thus, we will finish our Farmer’s journey with an outlook into the promising future and discuss why you should prepare some dry powder on the sideline. As B.C. Forbes already told us:
“It is only the farmer who faithfully plants seeds in the Spring, who reaps a harvest in the Autumn.”
Curious to hear how an industrial engineer has become a happy Terra farmer during spring? Well, then, let’s start with my transformational thought process.
1 | Liquidity Providers, or Farmers, and where they come from
In the last months, a new class of market participants appeared at the inception of decentralized exchanges. One that I would become part of soon: Liquidity Providers or so-called Farmers. Let’s have a quick look at why they are an essential part of DeFi.
As you know, Decentralized Exchanges (DEXs) like Uniswap or PancakeSwap use Automated Market Makers (AMMs) to trade assets in a permissionless way. Instead of having a classic order book on a marketplace to cite buyers and sellers together, AMMs manage liquidity pools (LPs). Those pools hold the assets that traders want to exchange. A simple example is a pair of two tokens like $UST and $LUNA. Both are part of the pool, each at the same value, ready to be traded against each other.
Consequently, the DEXs need liquidity to operate. So here is where the providers come into the equation. But why would somebody give away the custody of their precious tokens? Liquidity providers typically earn a fee for providing tokens to the pool to their pool share. To define the pools share, providers receive liquidity pool tokens (LP tokens). The fee comes from the traders that interact with the liquidity pool.
However, DeFi gained momentum once the DEXs rewarded providers with additional tokens like Uniswap with $UNI or PancakeSwap with $CAKE. It is a pretty smart move, as they use the tokens as an instrument to attract liquidity into their pools. Eventually, DEXs enabled a new income stream for investors with this instrument, as the reward tokens surged in interest and so in price. Thus, as the providers “farm their rewards” on the protocols, the “DeFi Farmers” were born. This new market participant is now very well known for searching for the best yield opportunities, pools, and DEXs. But, of course, Brett Brian knew it already:
“Farming is a profession of hope.”
The hope for yield didn’t stop with DEXs and reward tokens. More and more protocols start to use the pooling concept to distribute their tokens fairly to the community within their dApps. Instead of an initial coin selling (ICO), protocols realize the distribution of tokens via farming pools (e.g., MINE-UST pool on Pylon). Ultimately, this leads to a new way for young protocols to engage with their community while diversifying the holder base. Sounds like Terra? Yes, we are getting closer to our homeland.
Community, Ecosystem, or Yield? A farmers choice
Now, it is no surprise that return rates of 200+% APR attract investors to take advantage of farming, even if they have to buy the assets to participate in the pool.
There are two trains of thought for farming. On the one hand, farmers might only be interested in the yield opportunity, thus selling token rewards immediately on the market. I call those the Bearish Farmers. On the other hand, the Farmer could hold or even reinvest the assets, thus taking advantage of the ecosystem. I call this class the Eco Farmer.
Indeed, there have to be reasons to become an Eco Farmer. Usually, there are two reasons:
- The design of tokenomics captures yield opportunities: SushiSwap serves as an example with their token $SUSHI, where holders receive protocol fees for every transaction. Or PancakeSwap, which has introduced a sophisticated burning mechanism for $CAKE via gamification.
- The reward tokens serve as governance tokens of the respective protocol. Thus, the Farmer holds governance rights, often incentivized via a staking mechanism as an additional revenue stream. Thus, if the Farmer believes in the protocol's future, he has an incentive to hold.
Here is where my personal Terra Luna Farmer love story starts. I am a Farmer that genuinely believes in the ecosystems and protocols in which I invest. I understand farming as an essential part of the ecosystem that enables trading and a healthy redistribution of tokens to facilitate true decentralization.
Yes, I farm to capture a new revenue stream, too. There is nothing wrong with the Bearish Farmer thesis. As always, the perfect Farmer is somewhere between the Bearish and Eco Farmer due to the opportunity costs of the pooled assets.
Nevertheless, I farm out of dedication to the ecosystem. Some might say that I put my money where my mouth is. Some might say that this is a bit naive. But, instead of buying the assets, getting total price exposure, farming allows me as a participant of the ecosystem to get rewarded in the governance tokens of all the new projects arising while helping to run it. It’s a win-win-win. With this mindset, I choose projects to farm with a long-term upside (in my research) as this multiplies my return on investment over time. My belief is bullish to stay in crypto terms. I think Will Rogers was also an Eco Farmer:
“The farmer has to be an optimist, or he wouldn’t still be a farmer.”
That is why I farm on Terra. Every project is another piece of the puzzle. Protocols like Anchor are indefinitely valuable from this perspective. Unfortunately, there is only a limited supply vested over four years. Unfortunately? Sorry, I mean, fortunately! Anchor is key to the success of the ecosystem. So many upcoming projects rely on the 20% stable yield. Well, the same applies to the Mirror token and its long-term effects on third-party apps to trade stocks permissionless. I feel more optimistic than ever on that thesis seeing the recent price action of $MIR, $ANC, and $MINE (probably due to our new Ethereum friends, who want to decide what happens to their bETH. Those OGs know how to play the game!).
So, where to start farming on Terra? Let us take it easy and not accidentally hurt ourselves with the rake before entering the fields. Let’s have a quick look at the essentials of crypto farming first.
Mastering the farmers’ craft | The Basics
As mentioned above, a few topics have to be considered before providing liquidity or stake tokens. Therefore, I will briefly touch upon two of the most crucial issues: The reward token APRs and the [mighty] Impermanent Loss.
Reward System: As we have seen earlier, a farmer benefits in two ways: Trading fees and reward tokens. Moreover, the reward tokens are usually responsible for the fantastic APRs of 100%, 200%, or even 300% plus. Sounds pretty fantastic? Yes, ser, all possible!
The caveat here is that being paid in reward tokens makes the yield expectations a function of the token price. Thus, a Bearish Farmer works against his yield, introducing selling pressure on the market. Be aware of the effects that these high-yield APRs intrinsically present. The higher the need for liquidity, the higher the rewards, thus seeling pressure.
So, be careful choosing farms and DEXs. 100% APR might look interesting. However, this is for a year of farming. On a day, those high numbers become more reasonable. For 100% APR, it is 0,27% on your pool position daily. Suppose there is no bullish or neutral price development; protocol fees for joining farms and a potential depreciation of the pool value will destroy your yield instead of creating more. Henri Alain would have been a great DeFi Farmer:
“Life on a farm is a school of patience; you can’t hurry the crops or make an ox in two days.”
Impermanent Loss (IL): IL is the most frightening topic of DeFi and the most fun. In a nutshell: Impermanent loss is the temporary loss of funds while providing liquidity because of the assets’ price volatility. It is important to note that the loss is comparing against HODLing the assets. The loss appears because of an arbitrage opportunity. It is impermanent, as the loss only becomes permanent if a Farmer decides to withdraw their liquidity for good.
If you are interested in mastering IL, I have a video with examples ready for you!
There are many other topics to talk about for hours on LPing: Curves, slippage, or capital efficiency, to mention a few. For starters, you are ready to take your first steps into the Terra #degenfarming world. So please fasten your seat belt, and let’s jump into the most cohesive and beautiful farming environment.
2.The Farmer’s dream called Terra Luna
So, a quick check-in before we proceed. First, are you still reading? Yeah, I guess so (puh, lucky me, Medium is tough with that “read ratio”). Second, did you make your mind up about which Farmer you want to be? Terra Farmers, please proceed (Eco Farmers only? Nah, we are a big family. We will get the Bears to the Eco side of life eventually)! And finally, do you have your “Impermanent Loss is a Meme” badge with you? There you go!
Now, let’s deep dive into Terra (finally). So, why Terra and why farming there? Well, the ecosystem is a cohesive arrangement centered around $LUNA and $UST as dollar stablecoin. As a Farmer, Terra offers opportunities to benefit from the tokens and protocols multiple times. For example, you can use bonded assets from Anchor on Mirror or farm assets designed for Anchor on TerraSwap. It is cohesive, easy, and also beautifully designed. Even saving your gains in $UST is beneficial, as there is a need to burn more $LUNA.
In terms of design, there are two ways to look at it. First, Terra provides an outstanding user experience. I got hypnotized using Anchor for the first time. All dApps have a beautiful, flat, and natural design language. Steve Jobs would have been a #LUNAtic for sure! Second, I determine design in terms of system layout. As stated earlier, all protocols exist to leverage the strength of the ecosystem. Eventually, they all serve the growth intention of $UST and thus the scarcity of $LUNA (NGA).
Ready to see the complete picture while enjoying the system design? Here you go! Welcome to Farmer’s dreamland called Terra.
In a nutshell: Currently, there are four different farming grounds besides the staking on Terra Station. We have Anchor Protocol, Mirror Protocol, Pylon Protocol, and TerraSwap as built-in DEX for Mirror. Take your time and identify the connections in the overview above. Yes, there are more dApps live. LoTerra or Spectrum Protocol. We touch upon them later, too.
One more thing, before we deep-dive through all protocols. I will touch upon the functionality of the protocols just briefly to focus on the farming opportunities instead. Every protocol has its flowchart to follow the different strategies. Eventually, I will rate all strategies in yield expectations (in %) and risk (own assessment). Time to farm!
Anchor Protocol | DeFi for everybody
We start with the first Terra DeFi protocol I used (wow, I have some nostalgia and feel old). Anchor Protocol: Our Terra farmyard — providing everyone proper stability.
Anchor is a savings protocol that offers stable yields on our precious $UST. In other words: Anchor is a decentralized money market that generates a steady 20% APY to lenders. Anchor creates the yield by leveraging liquid staking collateral positions. Users can provide these positions and borrow against them. Therefore, Anchor captures the staking rewards as well as an additional interest on the borrow.
As a DeFi protocol, Anchor is tremendously easy to use. In my opinion, it is an excellent onboarding platform for new DeFi Farmers. By the way, I have an article to onboard your family and friends ready (sorry, my mother was asking me all the time who Anchor is, as I spent so much time with him. So I had to write something easy):
The protocol has four farming opportunities tied to different tabs: EARN, BORROW, BOND & GOVERNANCE. Just recently, Anchor received a front-end update that combined all farming opportunities on “MY PAGE.” However, for the sake of simplicity, we keep them separate.
The most straightforward and also safest farming opportunity in the whole DeFi world is EARN. On EARN, we can capture between 19.5 and 20.5% yield fixed on $UST, depending on how much value the protocol captures. To this date, this is the highest yield opportunity on stablecoins.
EARN offers a fantastic opportunity to “park” your free capital resources. There is no restriction to deposit or withdraw funds at any time. The only caveat is transactions fees for depositing $UST. While depositing, Anchor mints $aUST, which is the token that captures the interest generated by the protocol. Thus, $aUST appreciates against $UST at a steady rate.
The tabs BOND and BORROW facilitate the money market. The borrower bonds $LUNA or $ETH to the protocol to borrow against it. Due to the current need to attain more liquidity, the user receives Anchor tokens ($ANC) while borrowing. Currently, the token rewards offset the interest rate. As a borrower, you can borrow up to a ratio of 45% of your collateral. If the ratio crosses 60%, called loan-to-value ratio (LTV), you become liquidated to pay your borrow.
While being exposed to the volatility of the bonded assets, there is an incentive to borrow money. From a farmer’s perspective, this is more money to farm while getting paid. If you own Luna or Ethereum, this gives you a low-risk opportunity with a safe LTV ratio. Of course, there is no clear answer to what a safe LTV is. I will make a case for an active Farmer that even a ratio of 45% is safe if you have liquidity at hand stored on EARN as the price has to fall 25%. Yes, possible, but for an active market participant still ok. So, choose your price decay to find a fitting LTV ratio. Some mobile games have pay-2-win models. Anchor is win-2-pay “other farms.”
Lastly, Anchor enables governance staking and runs its liquidity pool. The governance staking APR is highly dependent on the value captured by the protocol. Currently, the rate is at 7%. As an Eco Farmer, this could be a great long-term opportunity. But, the liquidity pool is presently way more attractive due to the APR of 50%, as Impermanent Loss is less likely due to the limited volatility of the Anchor governance token. So, let’s visualize the whole farmers’ journey at Anchor.
Let´s talk about yield and risk! Anchor Protocol is the base of a common Terra Farmer in those two categories. All gains can be deposited safely on Anchor EARN while still earning a 20% yield. It feels like cheating the holy fields of DeFi. The same applies to the BORROW section. While there might be more attractive yield opportunities for $LUNA (spoiler alert!), providing collateral unlocks a great chance to leverage the EARN side even further while earning $ANC. The governance staking is low risk. True Eco Farmers might want to take part in the governance and store their reward tokens there. Still, the ANC-UST pool seems like a better yield opportunity at the current APRs, as both suffer price volatility. Pick your strategy wisely, Mr. Farmer!
Mirror Protocol | Democratizing financial assets
Mirror Protocol launched as the first dApp on Terra back in February 2021. So maybe we should start calling Mirror the OG (Terra OG, thus TOG!?). The protocol enables the creation of synthetic assets called mAssets. Similar protocols are Synthetix on Ethereum and Fabric on Solana.
mAssets imitate the price behavior of real-world assets. The most accessible examples are stocks. Mirror gives traders anywhere open access to price exposure without owning the actual assets. Moreover, the minting of mAssets is decentralized and initiated by users opening a collateral position.
TerraSwap powers Mirror as DEX and AMM to exchange assets. Hence, users can join mAssets farms, provide liquidity, and, no surprise for you, earn Mirror tokens ($MIR). After the launch, you had the chance to trade assets, provide liquidity, stake your rewards for governance, or mint collateralized assets with $UST. Due to the high farming rewards of far over 100% APR in the early days of the protocol, the dApp soon became a hot place for Farmers. Unfortunately, this led to a demand surplus for mAssets.
The demand surplus created a price premium between the Terraswap and Oracle prices from the real world. As a result, users started to mint assets and then sell them against Terraswap pools to reduce price premiums and repurchase them later. This premium created an arbitrage chance. Users minted assets only during market hours, sold them on the market, took the bonus, and closed their collateralized position. The result: The market was still lacking mAssets, and the cycle started over — a nightmare.
With the release of Mirror V2, the nightmare ended by introducing Short Farms. A Short Farm acts like a staking pool for collateral. Instead of opening a collateralized borrow position to mint mAssets, you receive $MIR tokens as long as you keep your position. It is a mix of borrow and farm position — that is why they are called short LPs (sLPs). In addition, you provide liquidity in the form of new mAssets to the protocol to prevent premiums. The caveat is that the protocol sells your minted assets on the market instead of giving you ownership. In addition, the protocol holds your $UST back for two weeks.
The Short Farms introduced an entirely new set of strategies into Mirror. Not only did they enable Short Farms to incentivize the minting of additional mAssets, but they also enabled the usage of volatile assets like $MIR, $ANC, and $LUNA as collateral. But even more importantly, the developers also added $aUST as collateral. So yes, our secure farmyard EARN on Anchor will now be further utilized. Welcome to the crazy part!
So, Mirror V2 in a nutshell: You can trade assets, stake your $MIR, and still mint assets. Additionally, you can create a Short Farm with aUST and still provide liquidity, now called Long Farm.
So, the question becomes, which farms generate the best yield. Does it make sense to focus on the Short Farms, or is there still enough incentive to go long on mAssets? Shall we buy them or go Short and then go Long Farming? So many great questions!
This set of questions made me start my career as a content creator. Many bright community members created great strategies, but they were challenging to digest due to the fantastic APRs in the first days of the protocol launch. So, I tried my luck and visualized them. The results can be seen in several videos on YouTube. I developed a strategy to be most capital efficient. I called it the “Degen Life” strategy and compared it to others. The result? You can find it conceptionally below. (Please note: Short and Long Farm rewards are taken from the same pool. Short Farms only generate yield in case of a price premium. This is a crucial takeaway for my strategy.)
So what is Degen Life? In short: You take advantage of leveraging your capital on Anchor Protocol with aUST. aUST is very safe as collateral, as it steadily accrues value at a rate of 20% APY. This is more or less at the rate of mAssets (stonks). So in a perfect world, there is limited risk for liquidation. On the flip side, you can buy back the minted asset on the market to become price neutral for your short position. To maximize gains, you can go on a Long Farm with the money you receive to provide a mAsset on the short farm after two weeks. Yes, I hear you! There is a risk of Impermanent Loss. Suppose the mAsset appreciates, you will not have enough to close your Short Farm. Nevertheless, the token reward will make up for this over time.
Ready to become a degen life enthusiast? Here you get a complete guide on how to do it! Instead of making this monster even longer, I give you a full breakdown of the Degen Life and other strategies on “the tube.”
Before we jump into the risk assessment, I want to share some thoughts on the mAsset selection for your farm. Due to the fantastic work of my friend @alphaDefi_, I have been able to share the historical data of all mAssets. You can find live information on the farming APRs on his page: LINK. Now, I encourage you to check the data and decide which asset fits your strategy the most. Upon asking which mAsset is the most successful for the “Degen Life,” I answer this: All of them.
Due to the concept of Short Farms to counteract price premiums, you will recognize that the APRs are incredibly volatile. Thus, the only way to get the most out of them is to diversify your mAsset portfolio. As you don’t benefit too much from an appreciating value, you can choose almost blindly all of the bluechip stocks. That is what I do. I catch them all (I had the red and yellow version! A bit nerdy, I know). Of course (and finally, I said it): All of this is not financial advice, fellars :)
So, what to take from this farming opportunity? I think Mirror is one of the most exciting farming opportunities in DeFi due to the very slow-moving mAssets based on stocks. The dilemma with liquidity pools is the Impermanent Loss and the risk of two volatile assets. On Mirror, mAssets are always paired with $UST. With slow-moving stocks, the risk of Impermanent Loss becomes almost irrelevant. The additional rewards from the Short and Long Farms offset the loss in virtually any case. I don’t even want to talk about how much leveraging aUST is a game-changer. It’s like putting your money in the bank while the bank allows you to still use it. Mindblowing.
So let’s take a look and my risk/reward ratio.
Pylon Protocol | The future of Investments
Ready for more Farmer’s alpha? Well, sorry, you have to be! Pylon Protocol is next!
Pylon consists of a suite of savings and payments products. Ultimately, Pylon is a protocol to leverage Anchors stable APY to provide services powered by deposits. Those services can be subscriptions like Netflix, Spotify, projects, or even content creation support. In addition, Pylons flagship application is their project launchpad called Gateway. Currently, Pylon is live with Gateway and a separate Webapp to enable staking and liquidity pooling of their native token $MINE. Both applications we will touch upon for farming yields.
Gateway first! The Gateway launchpad allows investors to make riskless investments while accessing all the upsides of apeing-in early. It sounds like Farmer’s heaven to me! First, investors deposit $UST to a project to earn tokens and governance rights. Then, after a lock period, early apes can withdraw their entire investment.
Let’s put our Farmer’s hat on and participate in a Pylon Pool. I call this strategy INVEST. So, we deposit $UST to a Pylon Pool. The pool locks the $UST for a certain period, from six up to 18 months. Next, the protocol takes the deposit and generates yield while unlocking the tokens allocated to the pool. In essence, locking up your $UST in a Pylon Pool means giving up Anchor yield in favor of tokens.
Seems to me like Eco-Farming 2.0. The idea is long-term, safe, and sustainable. By the way, this could lead to extremely promising investments, as farmers can get tokens for a way lower price than traded on the market. How? Well, I think you should look at this fantastic article by Patryk on Loop. Patryk even added an Excel calculator to do the math. Enjoy the alpha (and in case you read this Patryk. Thank you for this gem, ser!): Click me.
As teased earlier, there is also the possibility to stake $MINE. Staking is a fundamental part of getting access to certain IDOs events. Therefore, I highly recommend having a stake of about 20k $MINE ready to qualify for any drop-event. Furthermore, I guess you are already an expert on the topic of liquidity pools. So, the MINE-UST pair is at an APR far over 150%. Do I need to comment on this opportunity? You are already a pro Farmer, ser!
Let us finish the gold $MINE review with a look at risk and reward. There is probably no better investment tool than §MINE on any DeFi platform to make it quick. INVEST gives you an almost risk-free investment tool (UST depeg and smart contract not taken into consideration) to get your hands on new protocols with a tremendous upside. Pylon and $MINE are the best examples themselves. Since their IDO, capped at 10k dollars per investor, which is exceptionally retail-friendly, the token has increased by 2200%. Did you miss the train? No, because the pool still allows you to get $MINE tokens at a price far beyond 5 Cents. Crazy? Yes, check out Patryks article! The governance unlocks additional ape powers, and the liquidity pool is over 150%. Everything prepared for a fantastic token dinner after a challenging year of farming!
TerraSwap | Fair Exchange for Everybody
We reached the final part, friends! I promise to share the most significant farming alpha in the Terra Ecosystem as a reward since you are still reading! (Are you still around? Could you give me a sign? Nod with your head. Nice!) And a big thank you for joining me on this journey.
TerraSwap is a decentralized exchange in its absolute state. TerraSwap was launched as a by-product of Mirror Protocol, as there is a need to exchange mAssets in a decentralized manner.
Unlike the OG DEXs mentioned above, TerraSwap has no native token to incentivize any liquidity provision. Instead, they solely focus on the fees for traders. And that’s all. Easy as that. What is interesting about TerraSwap, is that they offer a set of trading pairs, which are unique and highly interesting for farmers. So let’s break them down.
I like to divide the pairs into the following sets:
- Native Tokens-UST
- bAssets-Native token
- bAssets — UST
mAssets-UST pairs serve to power Mirror Protocol. Therefore, the farming opportunity is not relevant, as there is no $MIR boost applied. Native Tokens-UST will be added more over time. The most important one is, of course, is LUNA-UST. This pool is connected to the Terra Station, as swaps managed of-chain. Hence, liquidity providing has particular upsides. The same applies to the pairs of bAssets-UST like bETH-UST, which are essential to enable liquidations for Anchor.
Now, the most underrated farming opportunity lies in the pair bAsset-Native Token. At the point of writing, there is only one pair live; bLUNA-LUNA. This pair, implemented as part of the liquidation mechanism of Anchor Protocol, is a risk-free pool to farm more LUNA. Since bLUNA-LUNA should be at a ratio of 1, there is no risk of Impermanent Loss. You split up your $LUNA into two stacks and provide liquidity.
Why is this the most significant farming alpha out there? Well, ser, the APRs are usually floating around 35%. Let that sink in for a moment. Are you back with me? So what, you don’t believe me? 35% $LUNA for free? Well, then I have a chart with the historical figures below, a video on YouTube with those numbers, and a shout-out to ALPAC4 and AlphaDefi_. Both fantastic community members, giving you access to Farmer’s heaven: Data points!
Our farming journey on TerraSwaps ends here already. And there is not much to talk about risks. However, I still owe you an assessment.
More to uncover | The special ones
It is crucial to outline on this point that I can not cover everything. As you might notice, this article is getting longer and longer and feels like a DeFi Terra bible (hopefully a bit more exciting). At the same time, I want to mention also the other dApps, which are already running on Terra: LoTerra and Spectrum Finance.
Spectrum Finance is a yield aggregator that can help you to leverage even further your Mirror farming rewards. In addition, LoTerra and Altered Protocol are two gambling-focused projects that can give you the big push if you get lucky. Shout-out to the dedicated teams behind the projects. Feel free to do your research to uncover the opportunities there!
And before I forget. I use this marvelous page to keep track of everything on Terra: https://finder.extraterrestrial.money/
Farmers future sowing | The next level
Final sprint! Let me recap what I said at the beginning of this article:
Thus, we will finish our Farmer’s journey with an outlook into the promising future and discuss why you should prepare some dry powder on the sideline. As B.C. Forbes already told us: “It is only the farmer who faithfully plants seeds in the Spring, who reaps a harvest in the Autumn.”
This section should be an article for itself, and it will be at one point. The sheer amount of upcoming protocols, unique and innovative, is almost impossible to understand. And I can’t hide a genuine and joyous excitement thinking about everything which will arrive in the following weeks and months. That is why I am here; the reason for being a dedicated Eco Farmer. Thanks to all the great developers out there! And thank you for letting me be part of this!
To put it in a structured manner, I chose the following way. First, you can find a fantastic overview of all current and upcoming projects at smartstake.io: https://terra.smartstake.io/projects
I decided to limit myself to give the spotlight to solely three projects. Trust me; these last days have been a big headache to take my final decision. But life is hard, and crypto shows no mercy! (And everybody will hate me for that. I accept my fate for now! Most likely because it kills me to not put in Apollo DAO or Tsunami or all the other!) So, here are my three personal Farmer dry-powder takes for the future of Terra Luna: Mars Protocol, Prism Protocol, and Astroport. Let me explain why and give you a short overview why those three. They are in no particular order.
Let us start with a short overview of the three protocols. Mars Protocol is a decentralized banking protocol and brings an actual money market to Terra beyond Anchor Protocol. In addition, Mars enables solutions like taking leveraged long or short positions on specific cryptos. Mars’ goal is to facilitate borrowing and lending of any token that runs on Terra. Because these assets don’t have fixed yields, Mars deposit rates are not stable but instead driven by demand for borrowing, both from borrowers and yield farmers. Even more relevant for us Farmers, the protocol will enable leverage farming to Terra Luna. I cut off here, as leverage farming will change the game on Terra (I literally can´t sleep anymore!)
Astroport arrives as an improved AMMs on Terra. Besides focussing on a unique curves model improving capital efficiency, Astroport aims to revolutionize the user experience to track DeFi gains. Thank good Astroport, I almost have to put in my CV full-time “Excel-Updater.” Furthermore, they state to launch “Terra’s first liquidity bootstrapping pool (LBP), which will allow projects to create liquidity for their tokens with very little seed capital and provide a fair launch where bots don’t have an edge.” Ok, tell me more, ser!
And finally, the pinnacle of wet DeFi dreams: PRISM Protocol. PRISM aims to be a revolutionary derivatives protocol. Their idea is to refract digital assets into two distinct parts: yield and principal components. Do you have a big question mark over your head? Well, we are just getting started! “PRISM empowers DeFi users with innovative tools to manage volatile price exposure and fluctuating yields. PRISM will synthesize these new instruments and enable their full functionality within a highly intuitive platform.” So they say. So I silently accept defeat for now with inner excitement.
And now they why… honestly, I am just a nerdy Farmer. Isn´t that enough as a reason?
Love is in the air | The Eco Farmer Thesis of Terra
Enough is enough. It will be the shortest outro I have ever done. Let me tell you this. After five sleepless nights, I hope you will join me in my journey as a sustainable, happy, excited Eco Farmer. If you share any of my long-term sentiments for this ecosystem, I need to tell you this: WAGMI!
The Terra Luna ecosystem is unique because it embodies what we all want: Freedom as sovereign individuals and as an inclusive community to get there.
I can’t wait to experience the DeFi future myself. So, I finish writing and go back to Twitter and Discord in search of more Farmer’s alpha to share with you soon :)