TeFi Autumn is here; which upcoming launches on Terra I am most looking forward to
Context: The Terra Ecosystem is set to go through a huge network upgrade (Columbus 5) at the end of this month; to put it simply, Columbus 5 is like EIP-1559 on steroids. Once launched, we should see a huge number of projects go live on Terra, bringing about a TeFi Autumn, and what I expect to be a large boost in both UST demand and the number of users on Terra. The rest of this article will cover the projects I am anticipating most over the next few months, but very briefly, I will first provide some context to the Columbus-5 upgrade, just in case you have been living under a rock.
To my mind there are 4 key benefits to the upgrade (just trying to keep it short for you guys);
1. Burning of all seigniorage — For those who don’t know, UST is a decentralised, algorithmic stablecoin which, instead of being collateralised, achieves stabilisation through arbitrage with LUNA. That is to say, the minting of UST requires the burning of an equal dollar amount of LUNA. Previously, a portion of this seigniorage has entered the community pool, following Columbus-5 however, this LUNA will be burned.
2. Swap fees will go to LUNA stakers — I will keep this one short, increased fees being routed to LUNA stakers taking the staking reward from the current 3–5% to 10–12%. Simple enough? Good times.
3. IBC compatibility via the Stargate upgrade — The Inter Blockchain Communication. Protocol (IBC) is a part of Cosmos and enables Terra further integration opportunities with a huge number of projects and dApps.
4. The launch of Ozone — This is Terra’s native insurance coverage protocol, both locking up UST and providing another layer of safety to Terraform Lab projects.
Now let’s get into the meat of the article, what’s launching and why I am excited by it. These are in no particular order and considering there are 60+ projects set to launch I also guarantee I will have missed a gem or two, sorry about that
Nebula Protocol
What is it? Nebula is set to offer customisable asset indexes, composed of synthetics and crypto-native assets, which can be rebalanced by triggers defined by you. There will be a number of flagship clusters at launch covering both mAssets and crypto assets, and I expect this will quickly grow
Why do I like it? As someone coming from a TradFi background, I think ETFs provide a fantastic tool for passive investing. However, like many TradFi options, they suffer from a number of rigid barriers to entry such as; hidden fees, KYC, geographic restrictions and truly horrific UX. Nebula should provide the ability to not only overcome these hurdles, but also provide users with the power to create their own clusters, composed of assets they choose, and defined by parameters set by the community. This is huge, in my opinion, and I will definitely be looking to lock funds into some form of index (probably an absolutely degen one at that). Or to put it simply, TradFi ETFs have been used to provide a passive hedge in the market, no bad thing per se, however Nebula enables us the opportunity to invest in narratives. Narratives defined and managed by the user. Fucking banks, who needs ’em, am I right?
You can see the current clusters and some suggestions for future clusters, here: https://forum.neb.finance/
Twitter link: https://twitter.com/nebula_protocol
Mars Protocol
What is it? Mars Protocol is, at its’ core, a borrowing and credit lending platform, analogous in many ways to existing protocols such as AAVE or Compound Finance (e.g. interest rates are determined by utilisation and, in theory, any asset can be listed via governance). However Mars innovates upon this model, please see the section below for details on this…
Why do I like it? Put simply, Mars is a step forward in composability versus both TradFi money markets and existing crypto protocols. Here are the two components I am most excited about; Firstly, Mars allows for uncollateralised lending, which should, in theory, leading to a boost in borrowing rates, utilisation rates and therefore lender yield rates. Very simply, you can gain exposure to farming yield, without swapping 50% of your crypto asset for UST to participate in a pool. In the interest of brevity, I won’t expand too much on this here, but in essence it allows users to deposit one side of a farming liquidity pool and add leverage via UST on top (and in theory short farm the other side should they provide UST and borrow the crypto asset). Mars will evaluate the risk of your strategy, e.g. risk of liquidation should the asset provided drop below a threshold price, and extends credit to the user based on this. As a user what does this mean? You can farm yields on your crypto asset by borrowing UST on credit without having to sell half your crypto asset (and increase the size of the position via the borrowing). The listing of assets will be determined by the Mars Risk Assessment Framework (details here: https://mars-protocol.medium.com/introducing-mars-protocols-risk-framework-1a452b49ad33). Secondly, Mars will be the first protocol to offer dynamic interest rates, whereby they are not predetermined, but instead evolve in real time according to market conditions, to try and maintain optimal utilisation rates. This aims to maximise returns for borrowers, lenders and MARS token stakers with rewards working in ‘cruise control’ to continuously adapt to credit conditions. End result = more money to everyone, hopefully.
Twitter: https://twitter.com/mars_protocol
Forge Protocol
What is it? Forge Protocol is a decentralised, cross-chain compatible, NFT platform launching on Terra. That’s as simple as I can make it, so let’s move on to why I like it (and boy do I).
Why do I like it? I actually wrote a quick thread on my twitter about this, but there are three main reasons Forge stood out to me; Firstly, Forge allows for the wrapping of ETH based NFTs on Terra. ETH represents a huge portion of the NFT market, and by allowing them to bridge onto Terra, Forge will allow people to utilise Terra’s low fees (I believe ETH fees have been a large barrier to entry for many wanting to explore NFTs), as well as also allowing people to display their multi-chain NFT collection in one place. Secondly, bids will be yield-generating — e.g. you can bid on a certain item and whilst it is in place, Forge will utilise protocols such as Anchor and Nexus to put your UST to use and earn income. This also means bids are inherently dynamic and grow over time, adding a layer of game theory for both the buyer and seller. Thirdly, unlike Opensea, Forge will allow for decentralised verification via a DAO. This is important because currently new projects listing on Opensea can be taken down via DMCA requests which are managed by a centralised entity and such actions remove power from the hands of creators and communities and can cause real damage to these projects.
Twitter: https://twitter.com/ForgeProtocol
Astroport
What is it? Astroport is an automated, decentralised exchange protocol looking to transform the user experience on Terra, and be not only the next step up from Terraswap, but any dex in DeFi.
Why do I like it? First and foremost, the design is extremely clean. For me, user experience needs to be at the forefront of DeFi dApps, especially if the target is broader adoption. Based on the existing evidence, I love the look of Astroport’s dashboard approach…
Beyond this, one component I find particularly interesting is Astroport’s liquidity bootstrapping pools (LBP) which looks to provide liquidity for a new project’s tokens with minimal seed capital, and therefore help provide an elegant solution to the bot issues which have plagued some of Terra’s recent launches. Astroport has many other great features to improve capital efficiency and minimise fees, for example, however it is both the potential user experience and the ability to support liquidity for new launches which excite me most about this one.
Twitter: https://twitter.com/astroport_fi
Kujira
What is it? Kujira Protocol, previously known as Harpoon Protocol*, has not only had a name change but also a fitting user experience update to match. Kujira allows for users to bid on at risk collateral on Terra dApps such as Anchor Protocol. These liquidation contracts were previously reserved only for the tech savvy whale, but with Kujira, anyone can bid on, and benefit from, liquidating collateral assets.
Why do I like it? Well, I have actually used it (currently in Beta: https://beta.kujira.app/), which is more than can be said for other things I am excited by! I really am a big fan of the team’s approach having launched a product quickly and then listening to, and engaging with, the community for future developments. I am hopeful to see other teams follow this method when the time comes. V2 of their platform will be launching in line with the updates to Anchor’s liquidation contracts, and having been allowed a sneak peek, similarly to Astroport, I am forever bullish on clean user experiences; and Kujira hits the spot. Kujira has also led the way in another regard to me, and it is a major one; democratising and decentralising core components of Terra dApps. As mentioned, Kujira enables the entire community to access a part of Anchor (liquidation contracts) and I believe we will see a wave of other protocols following in their footsteps to continue putting as much power as possible in the hands of the user. An example of this is my next pick; Whitewhale.
Twitter: https://twitter.com/TeamKujira
*Note: The old Harpoon socials appear to have been rebranded by someone outside of the Kujira team to Lighthouse. I have no clue what this is. Make sure to follow the link above to stay up to date.
Whitewhale
What is it? Whitewhale is a project which aims to support the stabilisation of the UST peg (with other assets to follow). The peg of Terra stablecoins is algorithicimically managed through arbitrage opportunities, that is buying an asset in one market whilst simultaneously selling it in another and profiting from the difference in price. This process has previously been reserved for a select few hedgefunds / market makers on Terra, which in theory adds a layer of centralised risk to the UST peg (I will allow your imagination to work out how someone could profit from this). Whitewhale will instead broaden this out to the wider community via their dApp, solving for this centralised risk, as well as providing a low risk profit opportunity (arbitrage) to users.
Why do I like it? As a community member, a common question new users ask me is how to profit from maintaining the UST peg (and whether they are doing so when buying/selling LUNA). Whitewhale finally provides this opportunity, and to my mind is what I would define as a ‘mission critical’ project, seeing as the peg of the stablecoins on Terra is absolutely central to Terra’s success and continued adoption. Beyond this, the simplicity of user experience (spotting a trend here?) is what interests me most, with a one-click deposit arb vault on the front end, and bots taking care of all the complex stuff. The funds invested in the vaults will be deposited in anchor until a profitable. de-pegging event occurs, so users will never have idle assets sitting around unused. It appears Whitewhale also. has big plans in future for expansion too; to support other digital assets on Terra such as stablecoins, the bLUNA-LUNA pool, and mAssets on Mirror, and to introduce a warchest which will offer returns collected from all the different vaults. Regardless of future updates, I consider Whitewhale to be one of the most important projects coming to Terra due to its’ core idea; to support the peg.
Twitter: https://twitter.com/WhiteWhaleTerra
Loop Finance
What is it? Loop is a decentralised exchange and content platform aiming to put community front and centre. To put it simply, it has lofty ambition; summarised, the vision appears to be the one-stop shop for decentralised users on Terra via a multi-chain dex, a leading wallet (with fiat on/off ramps and support for NFTs) and becoming the ‘Medium’ of Terra.
Why do I like it? Well, like I said, lofty ambitions. However what makes me bullish on Loop is that they are already delivering. Their site is buzzing with community interaction, informative posts and activity (incentivised by the provision of Loopr tokens), and whilst a lot of components are currently live, the profile section is intuitive, and it does have a sense of ‘community hub’ to it.
Further to this, Loop aims to list Terra assets as well as provide multi-chain asset support via wormhole, enabling the listing Solana and Ethereum based assets, as well as synthetic versions of BTC, BNB etc via a Thorchain integration. This only enhances the sense of a ‘one stop solution’ that Loop appears to be aiming for. I guess, in summary, whilst a single site which allows a user to research their favourite crypto and news, engage with community members, maintain their crypto assets (including NFTs), on/off ramp their fiat, and conduct multi-chain swaps is a huge undertaking, I like what I have seen so far from Loop Finance.
Twitter: https://twitter.com/loop_finance
Honourable mentions:
Nexus Protocol: A yield optimisation dApp, products include vaults which remove liquidation risk from strategies such as bLuna loans on Anchor Protocol (whilst maximising yields), and automating delta neutral farming positions for mAssets on Mirror Protocol. Twitter: https://twitter.com/NexusProtocol
Spar Protocol: An on-chain asset management protocol to simplify the investment process by allowing users to have a transparent view of pool manager’s performance record and strategy, and to invest accordingly. Note; this one is probably only an honourable mention because it hits too close to my day job, idk, sounds like a cool dApp though, right? Twitter: https://twitter.com/spar_protocol
Angel Protocol: A charity based protocol aiming to create perpetual charity endowments. Angel has already got a number of agreements in place with other projects and to be honest is the very first charity centred project which actually excites me, makes sense and seems like anything but a marketing gimmick. I like this one. Twitter: https://twitter.com/angelprotocol
Prism Protocol: Prism allows for the refracting of digital assets, that is, splitting apart the yield and principal component of the asset in order to provide composability and liquidity to users. To me, the opportunities this could enable are pretty large, but a simple example would be to allow a user to sell future yield on an asset for a set period of time and borrow against that fixed yield. This idea spawns from the interest rate and currency derivatives market whereby a user guarantees their returns by swapping variable yields into fixed yields or swapping future payments in one currency into another currency of their choice. This innovative approach to DeFi should provide users with plenty of new investment and risk management opportunities, and I am excited to see what they come up with at launch. Twitter: https://twitter.com/prism_protocol
Well, that is it from me, these are some of the launches I am most looking forward to on Terra over the coming months. Please feel free to let me know why I am wrong, and what I have missed. The truth is there are about ten additional projects that could be listed here, and numerous others popping up daily which I haven’t had chance to learn about yet. No doubt I will be publishing another one of these at some point to reflect that.
If you enjoy my rambling — feel free to give me a follow on twitter, all forms of love and adoration are acceptable: https://twitter.com/terranaut3 (hoping to upgrade to Terranaut 1 soon)
