Yesterday when I broke down Anchor's 20% APR interest post I briefly talked about the collateral Anchor requires in order for borrowers to take out UST loads. When the borrower's collateral is below Anchor's requirements the collateral will be liquidated. For Anchor to automate this liquidation process they have Kujira working in sync with orders in placed to purchase any liquidated bLuna and bETH.
Kujira In Action
bLuna can be seen close to par with Luna even though bLuna is locked up for 21 days. Anyways with the current drop in Luna prices it will drop in similar fashion with bLuna. Buyers using Kujira are then automatically placing orders on any bLuna Anchor protocol is selling. As of now Luna is a little over $68 and drop from all time high of $103. Almost 45% drop from all time highs.
The Kujira present screen shot taken at the time of this post has around $51 million in UST awaiting at lower levels of bLuna prices ready to buy. This is a form of support for Luna prices since there are buying pressure.
Anchor protocol has borrower's total collateral on a down trend prior to Luna downward price but the price drop has only accelerated the drop in collateral. This is concerning to Anchor since the deposits have also risen since the collateral has fallen. The earned UST on Anchor is only widening by the day.
When the green and black lines widen any further it will only accelerate Anchor's use of its reserves to sustain current reward payouts. This is unsustainable as mentioned yesterday in my Anchor post.
Investing in cryptocurrency comes with volatility. As of now the total value locked in Terra blockchain has fallen to become 3rd overall behind Binance Smart Chain. This however in no way is making Terra Blockchain any weaker. In fact since Kujira is working on picking up Anchor's collateral the whole system seems to be operating very efficiently. Now it is just a matter of time to see if Luna prices have bottom and TVL can again steadily increase.
Final thought I would like to mention Kujira has its own analytics on the platform in regards to how many traders are bidding and at what price for liquidating bLuna and bETH. Yet in order to access the analytics user of the platform has to stake at least 300 native token Kujira. I will be accumulating 300 from here on in search to learn more in regards to the collateral sales. All upvotes earned in this Terra blockchain related post and future posts will be used toward this objective until I hit 300 Kujira. Currently the price of Kujira is $0.8916 each.
None of what I write is financial advice. It is for entertainment purposes only. Thanks for reading!
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