Where has time gone? It was the end of May just the other day, I looked at the calendar today and tomorrow is September. Have you ever had this feeling that time just flew by you? Goodness, I don’t know if it was the work or the market that kept me so busy but I did have a plan to start writing more often, I swear. I don’t want this to become another new year’s resolution that I will not make, just like my last 5 marathons that I never ran. Well today is my day off and I made a deal with myself that I will try to write one of these articles at least once every two weeks. The plan now is to make a repository of all the different projects I have been involved with so you can see for yourself if you can learn from my experience.

Let's get started shall we?

Before the next installment of The Good, The Bad and The Ugly where I will be discussing my first bad investment, I thought it best to write about a good one that I have been involved with since the beginning of this year and so far, am quite happy with the returns and possible future. As per the title I am of course talking about the Terra project and LUNA. I first came across Terra and LUNA when researching about Anchor and their 20% stable yield APY savings account. I was, naturally, interested. I do have a savings account with my bank for retirement but as per the last earnings report they have provided me I was only making around 3% interest a year. That is not bad, but it is variable. But a 20% fixed rate on savings? Could that really be achievable? I decided to try it out for myself. As it turns out, the 20% is also variable as you have to read the fine print over at the documents page but it does stay around the peg as advertised, even when a bad liquidation event happens over at the borrow side of Anchor as was the case in June when LUNA prices collapsed, triggering margin calls on borrowed cash where to counteract this rewards for borrowing were increased significantly to incentivize depositing more collateral and the Earn side of Anchor (your digital retirement fund) dropped temporarily to a 17% APR. It currently sits at 19.49% and has been stable here for the last couple of months.

Now, it is not all sunshine and roses with Anchor, as I did experiment with the borrow side as well and due to my poor timing of the market ended up getting liquidated multiple times on a 4000 USD loan I required at that moment in time. There was even this one occasion that, despite paying 300 USD to lower my debt from hitting the liquidation call I still ended up being liquidated three times on that single day. And with only LUNA at the time being able to be added as collateral the around 800 LUNA I had, back in May worth 8000 USD, as you need at least a 50% loan to value evaluation in Anchor, soon got down to around 200 when I decided to close the position and liquidate the remaining loan amount. With today’s LUNA price I sure wish I still had all of my 800 collateral. But I will go into more detail about borrowing capital and what is the best place to do it at in a different post.

Despite this hiccup with Anchor I am still using their product today on the Earn side to, like suggested above, create a sort of digital savings account for my retirement. Since the 20% they offer compounds automatically, at the end of every month I have been depositing an average of 150 UST (the Terra ecosystem stablecoin pegged to the dollar) and letting it compound. And there is something quite hypnotic about watching compounding interest grow day to day, if you can get over the anxiety of it not growing fast enough. Pro tip, don’t look at it every day. Take a step back, enjoy your time and when the end of the month comes around for the next deposit go ahead and look how much it grew.

But wait there's more!

Terra offers so much more than simply Anchor and if you have the time to explore the ecosystem and the projects that are already live and the upcoming ones I do believe they have a fair shot at capturing some interest in the cryptocurrency and blockchain space. For starters their blockchain is fast and cheap, compared to the Ethereum gas fees what you pay in LUNA for operations in their native wallet the Terra Station is a fraction of a penny. The wallet also comes with a desktop and a web browser extension that automatically syncs between the two, something that I absolutely love, and it enables native staking of LUNA. All you have to do is delegate your stake to a validator of your choice, make sure you do your proper due diligence when choosing a validator as there are slashing risks for misbehavior, and you will start receiving LUNA at a rate of about 5.8% per year according to Staking Rewards (Side note, I absolutely love Staking Rewards for researching new potential projects for portfolio growth. What a great platform they have built!)

As you can see from the photo above the staking dashboard provides you with all the information you need when choosing a validator. You can even click the profile of them for additional information such as their website, a short description of themselves and if they have been verified on Terra Validators. As always I recommend you research to the best of your ability before making any decision so that you can be confident that you are as best informed as possible. Currently I have my biggest delegation attributed to Smart Stake as I do use their products for Terra and Harmony and they have very useful resources for both of these blockchains in terms of analyses. They even provide an airdrop tracker where all you need to do is input your wallet address and you will always know when it is time to collect you next Terra airdrop and on what platform.

Friendly Airdrop Inbound

And that is another perk of the Terra ecosystem. By staking your LUNA to any of the validators you are automatically awarded airdrops on current and upcoming projects that choose to use them on the Terra blockchain, depending on the amount you stake of course but it is a good incentive to have. Just to exemplify it further I can tell you briefly about Pylon Protocol, they describe themselves as building the next generation of payments. You can find out more about them in the website. Now when the project launched I received an airdrop of 440 MINE tokens, at the time of the airdrop worth 36 UST, not bad for a free airdrop. And every week I can claim an additional 9 MINE. They offer staking in their platform of their token and a liquidity pool with farming for the DeFi enthusiasts among you. I chose not to sell the airdrop at the time and today those 440 tokens are worth 75 UST. I am also staking them and the airdrops I am using to provide liquidity in their pool for extra income. Overall, I think Pylon is interesting and I am not sure if I would have found it had it not been for the airdrop I received as an incentive.

Terra is definitely something I will be keeping an active interest on. I like their blockchain, I like the projects on there and I am considering building a validator there to support the project and as another revenue source. Nothing is decided yet as I am studying the documentation for building a validator and will have to consider the costs/rewards. But as a user I am very pleased with what they have built. And as a passive income source there is definitely a lot of potential with them and the projects on the Terra blockchain such as Anchor, Pylon and Mirror, not to mention the staking of LUNA itself. As a closing I would like to thank The Defiant for bringing Terra and Anchor into my radar, their content is always very informative and very well produced.

As a disclaimer I am obliged to say that none of my articles are financial advice. My content is for informational and entertainment purposes only and does not constitute a substitute for personal counsel or professional advice in finances. What has worked out for me might not work for you. Make sure to do your own research so you can make the most informed decision for yourself.

Thank you for reading.