{"id":57927,"date":"2022-02-17T07:00:00","date_gmt":"2022-02-17T05:00:00","guid":{"rendered":"https:\/\/forklog.com\/en\/?p=57927"},"modified":"2025-09-04T14:12:02","modified_gmt":"2025-09-04T11:12:02","slug":"how-to-earn-on-stablecoins-and-synthetic-stocks-in-the-terra-ecosystem-part-1","status":"publish","type":"post","link":"https:\/\/u1f987.com\/en\/how-to-earn-on-stablecoins-and-synthetic-stocks-in-the-terra-ecosystem-part-1\/","title":{"rendered":"How to Earn on Stablecoins and Synthetic Stocks in the Terra Ecosystem (Part 1)"},"content":{"rendered":"<p>The DeFi segment is continually evolving \u2014 new protocols and platforms are emerging, along with broad opportunities for passive income.<\/p>\n<p><!--more--><\/p>\n<p>Many believe that investments in cryptocurrency are fraught with high risk due to volatility, but in recent years popular services and even ecosystems have emerged, with stablecoins at their core.<\/p>\n<p>In December the Terra <a href=\"https:\/\/u1f987.com\/en\/news\/terra-defi-ecosystem-tvl-surpasses-18-billion\">fell to second place<\/a> by total value locked (TVL), trailing only Ethereum. This happened largely thanks to the success of <a href=\"https:\/\/defillama.com\/chain\/Terra\">Anchor<\/a> \u2014 the ecosystem\u2019s largest project, offering about 19.47% APY on deposits in the stablecoin UST.<\/p>\n<p>Terra also has the synthetic-assets service Mirror Protocol and many other tools for a range of investment strategies. <\/p>\n<p>Earlier ForkLog <a href=\"https:\/\/u1f987.com\/en\/news\/how-to-earn-on-stablecoins-in-a-bear-market\">looked at<\/a> opportunities for passive income in the networks <a href=\"https:\/\/u1f987.com\/en\/news\/binance-smart-chain-to-be-renamed-bnb-chain\">BNB Chain<\/a> and <a href=\"https:\/\/u1f987.com\/en\/news\/what-is-fantom-ftm\">Fantom<\/a>. In this article we discuss Terra.<\/p>\n<div class=\"wp-block-text-wrappers-keypoints article_keypoints\">\n<ul class=\"wp-block-list\">\n<li>The Terra ecosystem is growing rapidly thanks to fast and inexpensive transactions, and the stability of the UST peg.<\/li>\n<li>The largest ecosystem project is the Anchor lending service. With an intuitive interface, it lets you deposit UST at around 19.5% APY in a few clicks.<\/li>\n<li>The Mirror Protocol platform offers the ability to trade and earn passively on synthetic assets, including using advanced strategies.<\/li>\n<\/ul>\n<\/div>\n<h2 class=\"wp-block-heading\">Getting started<\/h2>\n<p>The TVL of the <a href=\"https:\/\/defillama.com\/chain\/Terra\">Terra ecosystem<\/a> exceeds $16 billion, according to DeFi Llama. More than half comes from Anchor.<\/p>\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"635\" src=\"https:\/\/u1f987.com\/wp-content\/uploads\/1-Terra-DeFi-Llama-1024x635.png\" alt=\"How to Earn on Stablecoins and Synthetic Stocks in the Terra Ecosystem (Part 1)\" class=\"wp-image-165447\" srcset=\"https:\/\/u1f987.com\/wp-content\/uploads\/1-Terra-DeFi-Llama-1024x635.png 1024w, https:\/\/u1f987.com\/wp-content\/uploads\/1-Terra-DeFi-Llama-300x186.png 300w, https:\/\/u1f987.com\/wp-content\/uploads\/1-Terra-DeFi-Llama-768x476.png 768w, https:\/\/u1f987.com\/wp-content\/uploads\/1-Terra-DeFi-Llama.png 1357w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><figcaption>Total TVL of Terra and the largest ecosystem projects. Data from <a href=\"https:\/\/defillama.com\/chain\/Terra\">DeFi Llama<\/a> as of 16.02.2022.<\/figcaption><\/figure>\n<p>The central element, Anchor, is the most popular algorithmic stablecoin UST. Its market capitalization has grown from $400 million to almost $12 billion in a year.<\/p>\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"949\" height=\"547\" src=\"https:\/\/u1f987.com\/wp-content\/uploads\/2-UST-Mcap.png\" alt=\"How to Earn on Stablecoins and Synthetic Stocks in the Terra Ecosystem (Part 1)\" class=\"wp-image-165448\" srcset=\"https:\/\/u1f987.com\/wp-content\/uploads\/2-UST-Mcap.png 949w, https:\/\/u1f987.com\/wp-content\/uploads\/2-UST-Mcap-300x173.png 300w, https:\/\/u1f987.com\/wp-content\/uploads\/2-UST-Mcap-768x443.png 768w\" sizes=\"auto, (max-width: 949px) 100vw, 949px\" \/><figcaption>UST stablecoin market capitalization dynamics from Terra. Data: <a href=\"https:\/\/coinmarketcap.com\/currencies\/terrausd\/\">CoinMarketCap<\/a>.<\/figcaption><\/figure>\n<p>UST outpaces Maker\u2019s decentralized stablecoin Dai in the CoinGecko ranking by several notches.<\/p>\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"273\" src=\"https:\/\/u1f987.com\/wp-content\/uploads\/3-CoinGecko-1024x273.png\" alt=\"How to Earn on Stablecoins and Synthetic Stocks in the Terra Ecosystem (Part 1)\" class=\"wp-image-165449\" srcset=\"https:\/\/u1f987.com\/wp-content\/uploads\/3-CoinGecko-1024x273.png 1024w, https:\/\/u1f987.com\/wp-content\/uploads\/3-CoinGecko-300x80.png 300w, https:\/\/u1f987.com\/wp-content\/uploads\/3-CoinGecko-768x205.png 768w, https:\/\/u1f987.com\/wp-content\/uploads\/3-CoinGecko.png 1277w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><figcaption>Data from <a href=\"https:\/\/www.coingecko.com\/en\/coins\/all\">CoinGecko<\/a> as of 13.02.2022.<\/figcaption><\/figure>\n<p>In the summer of 2021 there was a significant surge in demand for UST amid growing popularity of Anchor. This led to active burning of LUNA and, in turn, a rise in the price of the cryptocurrency.<\/p>\n<p>Another driver of demand for UST was the popularity of the <a href=\"https:\/\/medium.com\/abracadabra-money\/our-ust-strategy-the-first-application-of-the-magic-potentialities-of-degenbox-ea35f13d6b5e\">Degenbox $UST-$MIM strategy<\/a> on Abracadabra. In addition, many new protocols launched shortly after the Columbus 5 upgrade, which took place in late September. Against this backdrop, the price of LUNA <span class=\"old_tooltip\" data-descr=\"annual yield\"><span><a href=\"https:\/\/u1f987.com\/en\/news\/terra-defi-token-price-tops-100-hitting-a-new-all-time-high\">pr\u0435valed above $100<\/a><\/span><\/span>.<\/p>\n<p>The Terra ecosystem counts more than <a href=\"https:\/\/www.terra.money\/ecosystem\">70 protocols<\/a>. To work with it you will need the Terra Station wallet, available as a browser extension or apps for <a href=\"https:\/\/apps.apple.com\/app\/id1548434735\">iOS<\/a>, <a href=\"https:\/\/play.google.com\/store\/apps\/details?id=money.terra.station\">Android<\/a>, Windows and Linux.<\/p>\n<p>Before you start with the wallet you will need to write down a secret phrase. Then you need to create a login and password for entry, and also obtain some UST to pay fees. You can buy stablecoins on an exchange like Binance, and then transfer them to your Terra Station address.<\/p>\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"477\" height=\"624\" src=\"https:\/\/u1f987.com\/wp-content\/uploads\/4-Terra-Station-extension.png\" alt=\"How to Earn on Stablecoins and Synthetic Stocks in the Terra Ecosystem (Part 1)\" class=\"wp-image-165450\" srcset=\"https:\/\/u1f987.com\/wp-content\/uploads\/4-Terra-Station-extension.png 477w, https:\/\/u1f987.com\/wp-content\/uploads\/4-Terra-Station-extension-229x300.png 229w\" sizes=\"auto, (max-width: 477px) 100vw, 477px\" \/><figcaption>A screenshot of Terra Station as a browser extension and the wallet address.<\/figcaption><\/figure>\n<p>Using the Add a wallet option, the app lets you create multiple wallet accounts from a single seed phrase. The Switch wallet function allows you to switch between wallets. With the Add tokens button you can add various assets to display in Terra Station.<\/p>\n<p>The cross-chain bridge <a href=\"https:\/\/bridge.terra.money\/\">Terra Bridge<\/a> enables transferring assets into the Terra ecosystem from other blockchains, including Ethereum, Binance Smart Chain (BSC) and Harmony.<\/p>\n<p>For example, you can withdraw part of liquidity from the UST-BUSD pool on PancakeSwap, where <span data-descr=\"annual percentage rate\" class=\"old_tooltip\">APR<\/span> stands at 8.77%, to then deposit the stablecoins into Anchor earning around 19.5% (as of 13.02.2022). There is a Twitter thread explaining the platform\u2019s business model and where such high yield comes from.<\/p>\n<blockquote class=\"twitter-tweet\">\n<p lang=\"en\" dir=\"ltr\">I\u2019ve written a few guides on how to earn high interest on your stablecoins using <a href=\"https:\/\/twitter.com\/hashtag\/DeFi?src=hash&#038;ref_src=twsrc%5Etfw\">#DeFi<\/a>.<\/p>\n<p>By far, the easiest and most passive (but also high yield) way is <a href=\"https:\/\/twitter.com\/anchor_protocol?ref_src=twsrc%5Etfw\">@anchor_protocol<\/a>, which currently pays out ~19.5% APY in UST.<\/p>\n<p>Let\u2019s see how that works. \ud83e\uddf6 \ud83e\udea1 \ud83d\udc47 <a href=\"https:\/\/t.co\/GnbhvNf4o9\">pic.twitter.com\/GnbhvNf4o9<\/a><\/p>\n<p>\u2014 shivsak.eth (@shivsakhuja) <a href=\"https:\/\/twitter.com\/shivsakhuja\/status\/1474870079682609153?ref_src=twsrc%5Etfw\">December 25, 2021<\/a><\/p><\/blockquote>\n<p> <script async=\"\" src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<p>On PancakeSwap, funds in pools are allocated in a 50\/50 ratio. So roughly half of the withdrawn amount will be BUSD. This stablecoin can be sold on the same PancakeSwap into UST.<\/p>\n<p>After that you need to:<\/p>\n<ul class=\"wp-block-list\">\n<li>go to the Terra Bridge website;<\/li>\n<li>in the From field select BSC, in the To field Terra;<\/li>\n<li>in the Asset field specify UST, and in the Amount field \u2014 the amount;<\/li>\n<li>as Destination Address, enter the Terra Station wallet address copied from Terra Station;<\/li>\n<li>click Next.<\/li>\n<\/ul>\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"745\" src=\"https:\/\/u1f987.com\/wp-content\/uploads\/5-Bridge-1024x745.png\" alt=\"How to Earn on Stablecoins and Synthetic Stocks in the Terra Ecosystem (Part 1)\" class=\"wp-image-165451\" srcset=\"https:\/\/u1f987.com\/wp-content\/uploads\/5-Bridge-1024x745.png 1024w, https:\/\/u1f987.com\/wp-content\/uploads\/5-Bridge-300x218.png 300w, https:\/\/u1f987.com\/wp-content\/uploads\/5-Bridge-768x559.png 768w, https:\/\/u1f987.com\/wp-content\/uploads\/5-Bridge.png 1126w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><figcaption>Data: <a href=\"https:\/\/bridge.terra.money\/\">Terra Bridge<\/a>.<\/figcaption><\/figure>\n<p>After confirmation, cross-chain transfers are credited quickly \u2014 in a matter of minutes.<\/p>\n<h2 class=\"wp-block-heading\">Anchor<\/h2>\n<p>As already noted, Anchor is the largest protocol in the Terra network by TVL. Besides the high <span data-descr=\"annual yield with compounding\" class=\"old_tooltip\">APY<\/span> (~19.5%), its intuitive interface is among the advantages.<\/p>\n<p>The Earn section is minimalist \u2014 Deposit and Withdraw buttons, an indicator of the current yield, and a switch showing the expected return over different time horizons (year, month, week, day).<\/p>\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"466\" src=\"https:\/\/u1f987.com\/wp-content\/uploads\/6-Anchor-Earn-1024x466.png\" alt=\"How to Earn on Stablecoins and Synthetic Stocks in the Terra Ecosystem (Part 1)\" class=\"wp-image-165452\" srcset=\"https:\/\/u1f987.com\/wp-content\/uploads\/6-Anchor-Earn-1024x466.png 1024w, https:\/\/u1f987.com\/wp-content\/uploads\/6-Anchor-Earn-300x136.png 300w, https:\/\/u1f987.com\/wp-content\/uploads\/6-Anchor-Earn-768x349.png 768w, https:\/\/u1f987.com\/wp-content\/uploads\/6-Anchor-Earn-1536x698.png 1536w, https:\/\/u1f987.com\/wp-content\/uploads\/6-Anchor-Earn.png 1742w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><figcaption>Data: <a href=\"https:\/\/app.anchorprotocol.com\/earn\">Anchor<\/a>.<\/figcaption><\/figure>\n<p>As with any lending platform, Anchor also offers the option to borrow funds secured by crypto assets. Collateral can include bETH and bLUNA. <\/p>\n<p>ETH can be converted to <em>bETH<\/em> (Bonded ETH) via the converter on the Lido project site. <em>bLUNA<\/em> can be bought with UST on <a href=\"https:\/\/app.terraswap.io\/swap?to=&#038;type=swap&#038;from=uluna\">TerraSwap<\/a>. Anchor also offers the possibility to convert <a href=\"https:\/\/app.anchorprotocol.com\/basset\">LUNA to bLUNA<\/a>.<\/p>\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"550\" src=\"https:\/\/u1f987.com\/wp-content\/uploads\/7-Anchor-Borrow-1024x550.png\" alt=\"How to Earn on Stablecoins and Synthetic Stocks in the Terra Ecosystem (Part 1)\" class=\"wp-image-165453\" srcset=\"https:\/\/u1f987.com\/wp-content\/uploads\/7-Anchor-Borrow-1024x550.png 1024w, https:\/\/u1f987.com\/wp-content\/uploads\/7-Anchor-Borrow-300x161.png 300w, https:\/\/u1f987.com\/wp-content\/uploads\/7-Anchor-Borrow-768x413.png 768w, https:\/\/u1f987.com\/wp-content\/uploads\/7-Anchor-Borrow.png 1340w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><figcaption>Data: <a href=\"https:\/\/app.anchorprotocol.com\/borrow\">Anchor<\/a>.<\/figcaption><\/figure>\n<p>In the right-hand side of the screenshot above you can see the parameters of collateralised loans:<\/p>\n<ul class=\"wp-block-list\">\n<li>Borrow APR \u2014 13.01% (loan interest rate);<\/li>\n<li>Distribution APR \u2014 11.06% (yield rate at which borrowers are rewarded with native ANC tokens);<\/li>\n<li>Net APR \u2014 -1.95% (the difference between the first two parameters).<\/li>\n<\/ul>\n<p>Sometimes the Distribution APR is higher than the Borrow APR. In such periods the service effectively subsidises borrowers. <\/p>\n<p>In the Govern tab you can stake earned or purchased ANC tokens, or <span class=\"old_tooltip\" data-descr=\"farm\" >farm<\/span> them in a pool with the stablecoin UST.<\/p>\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"387\" src=\"https:\/\/u1f987.com\/wp-content\/uploads\/8-Govern-1024x387.png\" alt=\"How to Earn on Stablecoins and Synthetic Stocks in the Terra Ecosystem (Part 1)\" class=\"wp-image-165454\" srcset=\"https:\/\/u1f987.com\/wp-content\/uploads\/8-Govern-1024x387.png 1024w, https:\/\/u1f987.com\/wp-content\/uploads\/8-Govern-300x113.png 300w, https:\/\/u1f987.com\/wp-content\/uploads\/8-Govern-768x290.png 768w, https:\/\/u1f987.com\/wp-content\/uploads\/8-Govern.png 1461w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><figcaption>Data: <a href=\"https:\/\/app.anchorprotocol.com\/gov\">Anchor<\/a>.<\/figcaption><\/figure>\n<p>In the first case, APR is 21.55%, in the second \u2014 61.72% (as of 14.02.2022).<\/p>\n<p>Yield for the ANC-UST pair in the corresponding Vault on Apollo DAO is almost twice as high.<\/p>\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"1004\" height=\"288\" src=\"https:\/\/u1f987.com\/wp-content\/uploads\/9-Apollo-DAO.png\" alt=\"How to Earn on Stablecoins and Synthetic Stocks in the Terra Ecosystem (Part 1)\" class=\"wp-image-165455\" srcset=\"https:\/\/u1f987.com\/wp-content\/uploads\/9-Apollo-DAO.png 1004w, https:\/\/u1f987.com\/wp-content\/uploads\/9-Apollo-DAO-300x86.png 300w, https:\/\/u1f987.com\/wp-content\/uploads\/9-Apollo-DAO-768x220.png 768w\" sizes=\"auto, (max-width: 1004px) 100vw, 1004px\" \/><figcaption>Data: <a href=\"https:\/\/app.apollo.farm\/\">Apollo DAO<\/a>.<\/figcaption><\/figure>\n<h2 class=\"wp-block-heading\">Mirror Protocol<\/h2>\n<p>The service is designed for the issuance and trading of synthetic assets. The instruments offered on <a href=\"https:\/\/mirrorprotocol.app\/\">Mirror Protocol<\/a>, with the help of oracles, track the prices of popular stocks, ETFs, as well as Bitcoin and Ethereum.<\/p>\n<p>In the Trade section, synthetic assets can be bought and sold, including via limit orders. They can also be farmed in pools with UST, choosing a long or short position. Yields on long and short positions are usually markedly different.<\/p>\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"752\" src=\"https:\/\/u1f987.com\/wp-content\/uploads\/10-Mirror1-1024x752.png\" alt=\"How to Earn on Stablecoins and Synthetic Stocks in the Terra Ecosystem (Part 1)\" class=\"wp-image-165456\" srcset=\"https:\/\/u1f987.com\/wp-content\/uploads\/10-Mirror1-1024x752.png 1024w, https:\/\/u1f987.com\/wp-content\/uploads\/10-Mirror1-300x220.png 300w, https:\/\/u1f987.com\/wp-content\/uploads\/10-Mirror1-768x564.png 768w, https:\/\/u1f987.com\/wp-content\/uploads\/10-Mirror1.png 1090w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><figcaption>Data: <a href=\"https:\/\/mirrorprotocol.app\/#\/farm\">Mirror Protocol<\/a>.<\/figcaption><\/figure>\n<p>In the screenshot below you can see open long positions on instruments based on <span class=\"old_tooltip\" data-descr=\"ARK Innovation Fund \u2014 flagship ETF from ARK Invest, led by Cathie Wood.\" >ARKK<\/span> and <span class=\"old_tooltip\" data-descr=\"exchange ticker of the SPDR S&#038;P 500 ETF Trust\" >SPY<\/span>. The annual yield of the first position is 13.69%, the second 11.42%.<\/p>\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"772\" src=\"https:\/\/u1f987.com\/wp-content\/uploads\/11-Mirror2-1024x772.png\" alt=\"How to Earn on Stablecoins and Synthetic Stocks in the Terra Ecosystem (Part 1)\" class=\"wp-image-165457\" srcset=\"https:\/\/u1f987.com\/wp-content\/uploads\/11-Mirror2-1024x772.png 1024w, https:\/\/u1f987.com\/wp-content\/uploads\/11-Mirror2-300x226.png 300w, https:\/\/u1f987.com\/wp-content\/uploads\/11-Mirror2-768x579.png 768w, https:\/\/u1f987.com\/wp-content\/uploads\/11-Mirror2.png 1042w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><figcaption>My Page section. Data: <a href=\"https:\/\/mirrorprotocol.app\/#\/my\">Mirror Protocol<\/a>.<\/figcaption><\/figure>\n<p>The Total Value shown to the left at the top displays the total value of assets, collateral, liquidity available for withdrawal, rewards, and those involved in staking <span class=\"old_tooltip\" data-descr=\"native Mirror Protocol token, in which farming rewards are accrued\" >MIR<\/span> and UST.<\/p>\n<h2 class=\"wp-block-heading\">How to earn more by pairing Anchor and Mirror Protocol<\/h2>\n<p>DeFi expert going by the nickname Route 2 FI <a href=\"https:\/\/www.getrevue.co\/profile\/route2fi\/issues\/defi-crypto-easily-explained-want-140-apy-on-a-stablecoin-try-the-terra-degen-yield-strategy-v2-1017048\">proposed<\/a> a strategy to maximise yields on deposited UST using the Terra protocols described above.<\/p>\n<p>According to him, you can raise APY from the standard 19.5% to 50-140%. The approach is relatively risky, since it involves using borrowed funds. It also requires periodic monitoring of the debt-to-value ratio (Loan-to-Value Ratio, LTV).<\/p>\n<p>&#8220;This is an active strategy, which means you must monitor it daily,&#8221; writes Route 2 FI. &#8220;You should always monitor higher-risk strategies.&#8221;<\/p>\n<p>The author recommends testing the proposed approach with small amounts. So for our example we\u2019ll use 1,000 UST, which corresponds to about 838 <span class=\"old_tooltip\" data-descr=\"When a user deposits some amount of UST into Anchor, they automatically receive aUST tokens. Likewise, when withdrawing stablecoins from the protocol, aUST is effectively exchanged for UST.\" >aUST<\/span>.<\/p>\n<p>In the first step we deposit funds into Anchor. Then we go to the Mirror Protocol Borrow section and select aUST as collateral, and mKO as the borrowed asset.<\/p>\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"665\" height=\"800\" src=\"https:\/\/u1f987.com\/wp-content\/uploads\/12-Mirror3.png\" alt=\"How to Earn on Stablecoins and Synthetic Stocks in the Terra Ecosystem (Part 1)\" class=\"wp-image-165458\" srcset=\"https:\/\/u1f987.com\/wp-content\/uploads\/12-Mirror3.png 665w, https:\/\/u1f987.com\/wp-content\/uploads\/12-Mirror3-249x300.png 249w\" sizes=\"auto, (max-width: 665px) 100vw, 665px\" \/><figcaption>Data: <a href=\"https:\/\/mirrorprotocol.app\/?utm_campaign=DeFi%20%26%20Crypto%20Easily%20Explained%20%F0%9F%93%88&#038;utm_medium=email&#038;utm_source=Revue%20newsletter#\/borrow#borrow\">Mirror Protocol<\/a>.<\/figcaption><\/figure>\n<p>Input the maximum value in the Choose a Collateral Asset field (in our case this is 838.947914 aUST). The strategy author suggests setting the Collateral Ratio to 130%. For safety, we\u2019ll choose 160%, since the position is liquidated if the parameter falls below 110%.<\/p>\n<p>Such a Conservative setup allows borrowing a little over 10 mKO. After clicking Borrow, Terra Station opens. It shows a transaction fee of 0.15 UST.<\/p>\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"464\" height=\"349\" src=\"https:\/\/u1f987.com\/wp-content\/uploads\/13-Tx-fee.png\" alt=\"How to Earn on Stablecoins and Synthetic Stocks in the Terra Ecosystem (Part 1)\" class=\"wp-image-165459\" srcset=\"https:\/\/u1f987.com\/wp-content\/uploads\/13-Tx-fee.png 464w, https:\/\/u1f987.com\/wp-content\/uploads\/13-Tx-fee-300x226.png 300w\" sizes=\"auto, (max-width: 464px) 100vw, 464px\" \/><\/figure>\n<p>After pressing Post and submitting the transaction, you need to go to TerraSwap and swap 10.36 mKO for 593.78 UST.<\/p>\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"423\" height=\"566\" src=\"https:\/\/u1f987.com\/wp-content\/uploads\/14-TerraSwap.png\" alt=\"How to Earn on Stablecoins and Synthetic Stocks in the Terra Ecosystem (Part 1)\" class=\"wp-image-165460\" srcset=\"https:\/\/u1f987.com\/wp-content\/uploads\/14-TerraSwap.png 423w, https:\/\/u1f987.com\/wp-content\/uploads\/14-TerraSwap-224x300.png 224w\" sizes=\"auto, (max-width: 423px) 100vw, 423px\" \/><figcaption>Data: <a href=\"https:\/\/app.terraswap.io\/swap?to=uusd&#038;type=swap&#038;from=terra1qsnj5gvq8rgs7yws8x5u02gwd5wvtu4tks0hjm\">TerraSwap<\/a>.<\/figcaption><\/figure>\n<p>The screenshot shows a fee of 0.3 UST and a spread of 0.32%. According to Route 2 FI\u2019s calculations, a spread above 0.6% is unacceptable.<\/p>\n<p>As a result, the transaction fee turned out to be lower than forecast \u2014 only 0.6 UST:<\/p>\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"376\" height=\"269\" src=\"https:\/\/u1f987.com\/wp-content\/uploads\/15-TerraSwap2.png\" alt=\"How to Earn on Stablecoins and Synthetic Stocks in the Terra Ecosystem (Part 1)\" class=\"wp-image-165461\" srcset=\"https:\/\/u1f987.com\/wp-content\/uploads\/15-TerraSwap2.png 376w, https:\/\/u1f987.com\/wp-content\/uploads\/15-TerraSwap2-300x215.png 300w\" sizes=\"auto, (max-width: 376px) 100vw, 376px\" \/><figcaption>Data: <a href=\"https:\/\/app.terraswap.io\/swap?to=uusd&#038;type=swap&#038;from=terra1qsnj5gvq8rgs7yws8x5u02gwd5wvtu4tks0hjm\">TerraSwap<\/a>.<\/figcaption><\/figure>\n<p>Then we redeposit the obtained 593.78 UST back into Anchor. Then we repeat the actions described above.<\/p>\n<p>With each iteration of this cycle, the total amount of aUST grows, and its value increases by roughly 19.5% per year.<\/p>\n<p>The video below explains the essence and features of aUST.<\/p>\n<p><iframe loading=\"lazy\" width=\"560\" height=\"315\" src=\"https:\/\/www.youtube.com\/embed\/oPT87ub1U2Q\" title=\"YouTube video player\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture\" allowfullscreen=\"\"><\/iframe><\/p>\n<p>The next screenshot shows that as a result of operations on Anchor and Mirror Protocol the total value of assets in collateral has exceeded the initial deposit of ~1000 UST.<\/p>\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"299\" src=\"https:\/\/u1f987.com\/wp-content\/uploads\/16-Mirror-Borrow-1024x299.png\" alt=\"How to Earn on Stablecoins and Synthetic Stocks in the Terra Ecosystem (Part 1)\" class=\"wp-image-165463\" srcset=\"https:\/\/u1f987.com\/wp-content\/uploads\/16-Mirror-Borrow-1024x299.png 1024w, https:\/\/u1f987.com\/wp-content\/uploads\/16-Mirror-Borrow-300x88.png 300w, https:\/\/u1f987.com\/wp-content\/uploads\/16-Mirror-Borrow-768x224.png 768w, https:\/\/u1f987.com\/wp-content\/uploads\/16-Mirror-Borrow.png 1097w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><figcaption>Data: <a href=\"https:\/\/mirrorprotocol.app\/#\/my\">Mirror Protocol<\/a>.<\/figcaption><\/figure>\n<p>If you repeat several such cycles, the amount of aUST in the Mirror loan collateral in mKO and its value in UST will grow even more.<\/p>\n<p>To close positions on Mirror, you simply buy the corresponding amount of mKO shares and click Close (<em>Manage \u2014 Close<\/em>). This can be done during Nasdaq\u2019s trading session.<\/p>\n<p>The protocol fee for such operations is 1.5% \u2014 this is worth considering. Moreover, the price of The Coca-Cola Company\u2019s stock may rise, and you may have to pay more.<\/p>\n<p>After closing the position, the collateral aUST will be released. Their value in UST will be slightly higher than the initial one, since the price of aUST gradually rises.<\/p>\n<h2 class=\"wp-block-heading\">Conclusions<\/h2>\n<p>A multitude of ecosystems and DeFi protocols yields a wealth of yield-maximising strategies, including those with leverage. However, one should not forget that using borrowed funds typically carries heightened risk. Complex strategies often require periodic user engagement and payment of multiple fees.<\/p>\n<p>Do not allocate a large share of funds to complex and sometimes opaque schemes. Also remember the principle of risk diversification. It means you should not concentrate all assets in a single pool, strategy, protocol or ecosystem, even if a high future return is anticipated.<\/p>\n<p>Subscribe to ForkLog news on Telegram: <a href=\"https:\/\/t.me\/forklogfeed\" target=\"_blank\" rel=\"nofollow noopener\">ForkLog Feed<\/a> \u2014 full news feed, <a href=\"https:\/\/telegram.me\/forklog\" target=\"_blank\" rel=\"nofollow noopener\">ForkLog<\/a> \u2014 the most important news, infographics and opinions.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>This article explains the possibilities for earning passive income in the Terra ecosystem.<\/p>\n","protected":false},"author":1,"featured_media":57928,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"select":"1","news_style_id":"5","cryptorium_level":"","_short_excerpt_text":"","creation_source":"","_metatest_mainpost_news_update":false,"footnotes":""},"categories":[1144],"tags":[1093,807,852],"class_list":["post-57927","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-longreads","tag-defi","tag-stablecoins","tag-terra"],"aioseo_notices":[],"amp_enabled":true,"views":"23","promo_type":"1","layout_type":"5","short_excerpt":"","is_update":"","_links":{"self":[{"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/posts\/57927","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/comments?post=57927"}],"version-history":[{"count":1,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/posts\/57927\/revisions"}],"predecessor-version":[{"id":57929,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/posts\/57927\/revisions\/57929"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/media\/57928"}],"wp:attachment":[{"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/media?parent=57927"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/categories?post=57927"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/tags?post=57927"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}