I will show you how to use EdgeProtocol on Terra to Lending and Borrowing UST at 27% APY and Qualify for Possible Airdrop. Edge Protocol is a money-market-as-a-service (MMaaS) provider on Terra ecosystem. Edge acts as a community-based pool creation platform and a portal giving retail users access to various lending pools. Dawn of Edge will contain the first money market pool of Edge Protocol marketplace. With Edge Protocol you can: Earn interest, Borrow, Leverage longs, and leverage Shorts. Genesis Pool allows users to create a position by freely supplying any number of assets available in the pool and collateralizing them to borrow any available assets in the pool. In the borrowing side, the collateral factor of your collateral will give you borrowing power, which you can use to borrow assets in the pool. After you have supplied an asset, turning on the toggle will use that asset as collateral.
I find that UST supply interest rate is 27.2% APY and MIR tokes at 28.2%. You can borrow at 75% of supply funds with a borrowing interest rate for aUST at 2.09% APY. You can rinse and repeat this may times over to effectively increase your supply APR by leveraging. Just do not borrow UST at 32% or MIR at 45.2% APY. If you do this very soon you will be hitting margin calls and get liquidated. You can borrow up to 90% of UST supply from EdgeProtocol.
Supply UST on EdgeProtocol
First, You need to connect your Terra wallet. For that I use Terra Station Extension for Chrome. It is very easy to setup. Have your UST and LUNA gas tokens on it. Connect your Terra Station wallet on EdgeProtocol. Go to the supply market section. In my case, I am going to deposit into UST because of 27% APY. Click Supply. Enter the amount of UST going to supply. I had only 1.6 UST. So I deposit only 1.3 UST. Click Supply and approve with LUNA gas fees. After the confirmation, your UST will be taken from your Terra Station wallet and deposited into borrow contracts inside EdgeProtocol. If you have few hundred dollars to invest in UST, I would supply to UST at 27% APY and borrow close to maximum collateral aUST at 1.97%. Use terraswap to convert aUST to UST and deposit back into EdgeProtocol. Repeat until you are down to under $50. This way you leverage your investment in Stablecoin while increasing your effective APY way higher than 27% APY provided for UST. Just make sure when you are nearing liquidation for the borrow side, unwind it or deposit more aUST to reduce your liquidation risk. This will not happen for year or so unless interest rates jack up on aUST. Every few months keep an eye on liquidation and interest rates.
Risk and Rewards
I like the fact Terra gas fees are pennies. I also like the fact I can earn 27% APY on UST deposits. I can fold multiple times and leverage higher to get much higher effective APY on my initial investment. I just have to un fold it sometime in the future when I am approaching the margin limits which are close to 100% borrowing. EdgeProtocol is a new DEX and there is always risk of Smart contract exploits where all funds or partial of funds can be lost due to an exploits. There is no entry for EdgeProtocol on defisafety.com. I also wanted to get in on EdgeProtocol's possible future airdrop if any.
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