Staking ETH on Terra using Lido and Anchor— My LIDO Scavenger Hunt

Staking ETH on Terra using Lido and Anchor— My LIDO Scavenger Hunt


 

How I remember being excited at the thought of going for treasure hunts! 
I never really did any but the thought of it used to give me a rush. Fast forward all these years, I see myself feeling the same. A kid lost in the scavenger hunt.

My Ethereum had been sitting idle in my Metamask wallet. My hands felt itchy. I needed to do something, Ethereum needed to get out. My head was full of ideas but there was no certainty about my calling until Lido spoke to me through Flipside Crypto.

 

Lido & Anchor — Best friends Ever

1*8Ribg_oeePwSeHTM1nGtbw.png Stake ETH with Lido

Lido is a DAO community with the mission of making Ethereum staking simple, liquid, secure, and decentralized for the end-user. DAOs are the perfect solutions and provide tools that bring DeFi closer to the users while removing the barriers to entry. Lido solves the existing problems of illiquidity, immovability, and accessibility associated with ETH 2.0 staking, thus making staked ETH liquid and allowing for network participation with any amount of ETH. Staking ETH with Lido helps to earn up to a maximum of 18.10% a year in staking rewards. There is no minimum amount to stake but it only makes sense to stake an amount that will give you the desired rewards considering the high gas fees. Staked ETH with Lido gives you stETH tokens on a 1:1 basis. stETH can be used just like regular ETH for on-chain activities like lending and yield farming.

1*9pIHsAq4YQf_geb2sOaBYw.png Collateralise bETH on Anchor

I honestly don’t know if Anchor needs an introduction but then again I can’t act like a LUNA-tic all the time. For future LUNA-tics, Anchor is a protocol on Terra blockchain that allows for depositing and redeeming Terra stablecoins, minting bAsset tokens, borrowing Terra stablecoins with bAssets as collateral, and participating in Anchor governance. It offers an attractive APY of 19.5% on UST deposit. Anchor protocol allows bAssets (bonded assets) to be used as collateral. In this case, stETH from Lido can be bridged over to Terra in the form of bETH which can then be used as collateral on Anchor to earn staking rewards in ANC. At present, the distribution APR is 38.2%.
The staking rewards from Lido are converted to UST which can be claimed by bETH holders and if used as collateral, rewards are paid to aUST holders through ANC.

 

Considering you have a Metamask wallet (or any other Web3 wallet) with ETH balance to stake and pay for the abnormally high gas fees. Also, considering you have a Terra wallet and some UST to pay for the transaction fees on Terra blockchain.
In case you aren’t familiar, there are tutorials available online for the same.

 

Stake ETH on Lido for stETH

I started my hunt on Lido. Since I needed to stake my Ethereum, I selected the ETH 2.0 network. I also read the additional details through the Read More option. The APR was 5% and not 18.10% which is the max APR. Alternately, you can also head directly to the staking page. I was about to connect my wallet and proceed with the staking up until the moment where my eyes caught the high transaction cost of $56.41. The hunt was over for now. 
I will have to wait for a better time until the transaction costs are somewhat acceptable for my appetite.

1*TwTcucoSBNUqdRqoRa6E-Q.png Stake ETH for stETH on Lido

For now, let us go with the assumption that I was able to stake my ETH and received stETH for the same.

 

Bridging stETH for bETH

My stETH from Lido needed to be bridged to Terra blockchain for bETH (which is like a wrapped version of stETH on Terra). It is important to understand that, unlike stETH which changes daily reflecting earned staking rewards, bETH remains constant and the staking rewards are accrued through UST. I used the Anchor-Lido bridge to do it. Again, the transaction costs were high.
My wait becomes longer.

1*wofxz4Zr82YXovk9A9GxAA.png Bridge stETH to bETH

In case you don’t see stETH balance in your Metamask, add it manually to the token list using these details -

Enter the stETH amount and the Terra wallet address. Once you confirm the transaction, you should see bETH in your Terra wallet.

 

Using bETH as collateral on Anchor

The final piece of the puzzle was to use the received bETH as collateral on Anchor protocol. I logged on to the Anchor Protocol and used my bETH from my Terra wallet as collateral to borrow some UST as a loan. It involved two steps, First was to provide the required amount of bETH and the second was to borrow the UST while maintaining a healthy LTV%.

1*5povpYOLxc2oEE2pjj8azQ.png bETH as collateral for UST

Deposit UST on Anchor

Now that I borrowed the UST against bETH, I went ahead and deposited that to earn a yield at an exciting APR of 19.5%. I got aUST in return which I then used as collateral on Mirror for bAssets. But that’s a story for another day.
Feel free to use the UST as you want. There are unlimited possibilities in Terra world.

1*-82Z2-TB9XTo9UbHa8NpXA.png Deposit UST in Anchor

A perfect example of cross-chain integration where we staked ETH from one blockchain to another, thus helping bridge different silos of the blockchain world and bring us closer to mainstream adoption.

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EverythingBlockchain
EverythingBlockchain

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