Defi is a force that cannot be stopped and the Terra ecosystem has many opportunities to Defi. Terra is becoming a game changer in the world of Defi and many believe that they are just getting started.
They have a name for the die hards in the Terra community: LUNAtics. Some of the best places to get started are AMM/DEXes. TerraSwap was the OG, but there have been some newcomers. Astroport seems to be all the talk, but it is not the most user friendly experience.
One AMM/DEX that has been quietly moving up the charts and stacking chips on that market cap, has been Loop Finance. If you are bullish on the Terra ecosystem, UST and LUNA, then Loop Finance is a protocol to pay attention to.
Loop trades under the symbol LOOP.
Loop on Coin Gecko
https://www.coingecko.com/en/coins/loop-finance
Loop Market Website
Here are some statistics as of 1/15/22. By time you’re reading this, I am willing to bet that it has increased on both metrics.
LOOP Market Cap: $29,336,157 and climbing.
The price has been steadily climbing too.
Loop Finance is not only very unique in the Terra Ecosystem, but in the overall crypto space as well. What makes it unique? We’ll take a look at their homepage.
What is this madness you may be asking? They are a DEX with an AMM, an NFT Marketplace and Community for learning and earning within the Terra Ecosystem?!?
Let’s break it on down.
Swaps
Starting with the swaps. They currently offer 20 tokens, most of them are from the Terra ecosystem, with the exceptions being wBTC, wETH and wrapped wMIM.
They also offer the aUST, aUST is an interest bearing asset which increases in value over time. It represents the UST that is deposited in the Anchor protocol, which yields around 20% a year. So it is constantly gaining yield. aUST is becoming a hot pair for LPs due to this. More on aUST in a bit.
AMM/DEX
Next let’s look at the DEX/AMM. The most known DEXes on Terra are the OG Terraswap and the much hyped Astroport.
Terraswap
Astroport
Now we have a new kid on the block, Loop Finance.
Here is a look at some of the LP pairs offered on Loop.
One only needs to take a look at a comparison of DEXes in the Terra ecosystem.
LOOP Markets vs. Terra Swap vs. Astroport
Luna-UST Pools Comparison:
Note: This snapshot was taken before the LP Pool snapshot
LOOP Markets is the DEX that offers the highest APR ever. In fact, the data show us the following:
LOOP Markets: 73.16%
TERRASWAP: 58.38%
ASTROPORT: 22.29%
As we can see LOOP Markets has the best performance, while Astroport the worst. Terraswap ranks exactly halfway between the two, but still well below LOOP Finance.
Next up, a pretty Delta Neutral Pool – bLUNA/LUNA:
Note: This snapshot was taken before the LP Pool snapshot
LOOP Markets: 21.35%
TERRASWAP: 12.87%
ASTROPORT: 0.88%
LOOP Markets has the highest percentage, while Astroport is the lowest and Terraswap is in the middle. Just note the percentage difference in return between LOOP Markets and Astroport. Loop is offering over 20 times the return on investment.
The bLUNA/LUNA pool has the highest TVL on LOOP.
Followed by the UST/aUST pool. A great way to gain yield on stable coins. Loop markets is currently offering 21.83% on that pair.
They are also offering 70.27% on the aUST/LUNA LP. If you are bullish on LUNA, this could be a nice return.
Comparative Analysis Of APR’s Across All AMM’s DEX On Terra Blockchain:
https://www.loop.markets/comparative-analysis-of-aprs-across-all-amms-dex-on-terra-blockchain/
If you want a safe yield strategy, let’s do a comparison of depositing UST in Anchor vs Loop Finance.
So if we understand the impact of IL and how it occurs, we now know that the risk of IL with the aUST – UST pool is minimal because the prices of both assets are are fairly constant as follows;
Deposit: 1 aUST = 1 UST
After first 12 months 1 aUST = 1.20 UST
1 UST is always 1 UST
This means the risk of impermanent loss is around 0.5%. So lets think about this.
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Place 2000 UST into the pool, 50/50 split between aUST and UST.
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Receive 20% Anchor yield on the aUST (approx $200 annually)
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Receive 20% APR for providing liquiduty (approx $400)
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Impermanent loss is 0.5%
At the end of a 12 month period if the pool remained constant, my UST is worth approximately $2587 so a nice tidy 587 UST passive income.
If I had instead took my 2000 UST and placed into Anchor it would be worth 2400 UST (2000 * 20% APR). So by adding to a liquidity pool I have earned an additional 187 UST.
The power of aUST:
https://www.loop.markets/the-power-of-aust/
Do I need to go on?
They have around 3 dozen pools/farms. With the higher APY being in the newer tokens. The LOOPR/UST pair is yielding 307.01%. I am participating in the LOOP/LOOPR farm, which yields 277.08%. My initial investment has doubled in just over a week, but that correlates with the LOOP token climbing the charts/
FYI: You are rewarded with LOOP tokens for participating in the LPs. Although, they current;y have a handful of other Pools that reward you in on of the LP pair tokens (HALO/DPH/LOOPR). Same goes with the Farms, speaking of Farms…
Farms
They also have Farms, where you can add your LP tokens. But, there are some guidelines.
m
How Farming Works on Loop Finance:
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Rewards start accumulating immediately.
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Rewards are now distributed hourly.
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Estimated rewards over the next hour are now visible.
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There is a 2 week minimum staking period before rewards can be claimed, but you can withdraw at any time.
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If you stake more LP at any time the 2 week timer will be reset.
Upcoming NFT Market
Now what about that NFT Marketplace? Well, it still isn’t live yet, but to have an all in one dAPP where you can swap, earn yield and get in the NFT game sounds good doesn’t it?
What makes it sound even better? Loop offers DeFi NFTs such as LP bonds, yield bearing NFTs, and NFTs linked directly to DeFi protocols such as Anchor. Say what?!?
You don’t just buy and sell NFTs to make money, you can Defi them.
Here is a preview:
Community
Who does not like getting paid for creating content?
Loop has their own Community that pays you to post as well. Not just for creating engaging content that teaches about the many aspects of the Terra ecosystem. You get paid in Loop’s native token LOOPR.
They have bounties too. You can currently earn up to $300 in LOOP to explain a specific hot protocol and they also have Terra Project explainers. The price of the bounties have gone down, they were $1000 at one point. But that was to get more to participate and promote the Bounties program.
Each month, Loop Community writers receive a LOOP airdrop based on the LOOPR they earn from their content throughout the month
The top authors on Loop get a bonus on top of what they have earned too. Challenge accepted!
Here is a look at more of the features of the Loop Community.
Tokenomics
In case you were wondering, yes they have a game plan, let’s start with the Tokenomics for the number nerds.
Note that in the first 12 months, around 300M LOOP tokens will be released. At the end of the 5-year distribution phase, 1B LOOP will be distributed. LOOP token is capped at 1 billion maximum supply.
As with all projects, when new tokens are released into the market, prices can be volatile.
To counteract this for Loop, we’ve scheduled significant product releases, protocol updates, community building, and marketing, which will help increase the demand for the LOOP token.
LOOP Token Sales
To not place unrealistic expectations on the LOOP token price, we have not sold any tokens for more than $0.10 per token. If the price remains at this level by the end of one year, this gives LOOP a $30M market cap (based on circulating supply).
Excitement among cryptocurrency investors has since led the price of the LOOP token to be much higher than $0.10 per token. As a new protocol, we expect the current price to continue to be volatile.
LOOP Use Cases
LOOP stakers receive:
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25% of DEX transaction fees, paid in LOOP
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50% of NFT Marketplace fees, paid in LOOP
DEX liquidity providers receive:
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75% of DEX transaction fees, paid in the tokens of the pool (eg. LUNA and LOOP for the LUNA/LOOP pool)
As we build out more LOOP products, further mechanisms for token value accrual will be added to the above list.
LOOPR Token
The LOOPR token is designed to be the incentive token of the Loop Community site. Its primary function is to reward content creators. It also has a limited connection to the LOOP token through airdrops during its distribution phase.
Currently, the LOOPR token is in an experimental phase as a social media incentive token. Its use and distribution will be adjusted over time to find the best ways to incentivize content creators.
LOOPR Distribution
The primary method of LOOPR distribution is in rewards for content creation through the Loop Community site. When registered readers rate articles, authors are rewarded with LOOPR tokens in their onsite Loop Community wallet.
The LOOPR token is currently held on the Loop Community site, on the Loop DEX, and in the wallets of previous Trybe contributors. Some Trybe contributors have sold their LOOPR tokens on the DEX.
More information about its relationship to Trybe: www.loop.markets/loopr-tokenomics-and-fud/
LOOPR Use Cases
Total LOOP distributed to LOOPR holders in upcoming monthly airdrops: 200K LOOP per month
LOOPR community members who have earned tokens on the Loop Community site (through creating articles etc.) since the last airdrop receive:
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33.3%* of the monthly LOOP airdrop (needs to be claimed on DEX)
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Weekly airdrops based on engagement, paid in LOOPR (automatically deposited to their onsite account)
LOOPR holders on Loop Community site who held LOOPR before the last airdrop receive:
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33.3%* of the monthly LOOP airdrop (needs to be claimed on DEX)
People who hold LOOPR in their Terra wallet:
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33.3%* of fixed monthly LOOP airdrop (needs to be claimed on DEX)
If you qualify for all three of the above, then the total LOOP you receive will be added up and available to claim in each airdrop.
LOOPR-LOOP liquidity providers receive:
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Share of the liquidity provider farming incentives on LOOP DEX
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*These numbers are subject to change, pending feedback from the community.
The future utility of this token includes a wide variety of uses on the community site, which we are enhancing and embracing as a crypto education site and overall marketing funnel for projects.
Roadmap
Where do we go from here. It is good to have a game plan, because those who fail to plan, plan to fail. Especially in the crypto space.
With all that Loop is doing so far, just looking at what is in the pipeline looks promising.
What other LUNAtics are saying
This was from January 11 2022
Dynamo DeFi’s video:
https://www.youtube.com/watch?v=MLF-51zy0mA&t=925s
More resources on Loop Finance
Loop Finance on Twitter:
https://twitter.com/loop_finance
Loop Community:
https://www.loop.markets/community/
Loop Finance Discord:
Loop Finance Telegram:
Loop Finance YouTube:
https://www.youtube.com/channel/UCecsvrIVwT-bgy6-lDIEBTQ
AMA Special w/ Co-Founders of Loop Finance:
https://www.youtube.com/watch?v=2MWmFhbkiKQ
Terra Bites Podcast with Tom Norwood Co-Founder of Loop Finance:
https://www.youtube.com/watch?v=7WRcmDycjSw
https://anchor.fm/terrabites/episodes/Earn--Trade--Farm-and-More-with-Loop-Markets-e19kq2n
Terra Spaces – From Twitter Spaces: Loop Holiday AMA:
https://terraspaces.org/2021/12/23/loop-holiday-ama/
