Terra Luna’s ecosystem continues to grow. Currently, its ecosystem has 74 dapps and its leading stablecoin, UST, has more than $15.3 billion in TVL. Also, a famous stablecoin-investment strategy in DeFi nowadays is to invest in Anchor Protocol which gives you 19.48% APY.
However, new DeFi protocols have appeared from Terra LUNA that complements each other. This allows that by holding the same tokens, you can have more profitability. Therefore, in this article, you will discover more about this new strategy.
A brand new strategy on $LUNA has just launched, and is offering insane yield potential. 🔥
🧵: A thread on @prism_protocol, and how to utilise the new pools to earn 48-200+% APR on your $LUNA.
Let's dive in. 👇
— Miles Deutscher (@milesdeutscher) March 9, 2022
The Terra Trilogy
PRISM is Terra’s protocol where you can stake, swap, and add liquidity in a yield farm. It is a pretty new platform that only has a TVL of $307 million. In addition, PRISM protocol has launched its new farm. It has opened up a new strategy with LUNA, the native token of Terra.
Therefore, in the PRISM protocol, there are three kinds of tokens:
- cLUNA = 1 LUNA (collateral token)
- pLUNA = Principle token (currently 13% of cLUNA)
- yLUNA = Yield Token (currently 77% of cLUNA)
Note: 1 cLUNA = pLUNA and yLUNA (% weighting fluctuates).
Moreover, to implement this strategy, you need to use the Terra Station Wallet. Let’s start with the strategy:
Step 1: Split LUNA to pLUNA and yLUNA
In PRISM, go to the “Refract” section (left column) and select the amount of LUNA tokens you want to split to get pLUNA and yLUNA. In addition, click on “Accept and Split”
Note: To reverse this “Split” process, you need to hold your pLUNA and yLUNA tokens. This takes 21 days.
Step 2: Stake your yLUNA Tokens on PRISM
Also, in this option, there are two options:
- yLUNA Staking: By staking yLUNA, you get airdrops and rewards for staking it. Nowadays, this option gives you an 8.57% APR.
- PRISM Farm: After farming your LUNA tokens, you need to swap them for PRISM tokens. With this, you will earn a 43.8% APR.
Note: PRISM rewards have a 30-day lock-up period before selling them.
Step 3: Stake your PRISM Rewards
When you get your PRISM rewards after staking, you will distribute them in the following way:
- 50% to get yLUNA(after 30 days)
- 50% to get more $PRISM.
To do this, you need to go to the “Govern” tab to stake PRISM and get xPRISM, the governance token of PRISM.
Note: Investing in tokens needs to have a previous analysis.
Step 4: Stake xPRISM to Earn AMPS
After getting xPRISM tokens, you can stake them under the “AMPS vault” label. Therefore, this way, you can earn AMPS which are used to boost your yield.
Moreover, there are many cases where users have earned up to 200% APR.
Note: The lightning icon to activate your AMPS rewards daily to activate your AMPS rewards. This means that as more AMPS tokens you stake, the higher the APR of your yLUNA.
On the other hand, you can buy PRISM to boost the number of AMPS tokens you can stake. However, this is a risky decision.
In addition, here is the strategy summary:
- Use your LUNA tokens and split them to get pLUNA and yLUNA (With the Refract feature of the PRISM protocol)
- Stake yLUNA in PRISM protocol with 48% APR.
- Take 50-100% of your rewards to get xPRISM
- Stake xPRISM under the “Govern” feature of PRISM protocol.
- “Pledge” XPRISM tokens in AMPS vault to boost rewards.
Finally, it’s important to remember that any DeFi strategy has its risks, so make sure to diversify your investment across multiple protocols.
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Great article, very thorough.
One concern: the otherwise impressive yields (48%, 200%) are paid in $PRISM, right? And it takes ~30 days to unlock? So if $PRISM behaves like other farming tokens, it could just steadily lose value over time. So the APR is just the amount of a variable token earned, with the scary unknown being how much that can be sold for at least two months after you started yielding?
It’s now mid-April. Prism launched about two months ago. That’s not enough time for sell pressure to build. I’m worried the devil is in the details with APR.