Liquid Staking Luna

There are so many methods to earn in Defi it can take countless hours to just see them all and figure out which ones can stack to maximize yields. A post I wrote yesterday on Solidex is one of the better solutions as its a yield optimizer. It essentially finds the pools with best yield rewards and earns that for investors. Yet what if you truly wanted to do this all on your own. In that you want to find the best yields on your own?

It may not be optimal to go at it alone of finding the best yields, but it sure can be close. One of the protocols that has been around for a few months is Terra's Stader and although it is specific only to Luna once you learn about it the application can be on any chain and just need to find the right projects.

Staking Versus Liquid Staking?

On Terra Chain if you hold Luna tokens you can stake them in the wallet to earn passive income. The income comes in the form of air drops and a Luna yield that is close to 9% APR. The higher the price of Luna the lower the % of yield earned.

Stader comes in to do something unique in that the Luna you hold can be staked on Stader directly to earn the 9% APR yield. In return Stader will also provide a receipt token that represents Luna and plus compounding interest of the yield in the form of Luna. The receipt token is LunaX and the value of it compared to Luna will continue to rise as long as you hold onto the LunaX.

There is a flexibility on how the rewards are distributed. Rather than stacking it in the form of LunaX investors can simply have the rewards be in the usual liquid state as such if the Luna was staked in the wallet. Having the option to reinvest rewards into LunaX or have immediate withdraw of rewards in liquid form gives investors a lot of flexibility.

LunaX Pools

LunaX is the liquid staking that investors can use to participate in farming liquidity pools. So in other words staked Luna on Strader earns the 9% APR a year and then use the LunaX to farm in liquidity pools to earn more APR.

Liquidity pools earnings such as on Stader has a LunaX to Luna pool to earn close to 12% APR.

Over at Loop.Finance there are a couple of LunaX to UST or Luna pools yielding some nice percentage of Loop rewards. Over time there will be more protocols having LunaX available to partake in pool farming.

Conclusions

If you had to take one thing out of this post it is that there are assets out there where you can stake the token and farm it at the same time. Stader is an example with Luna being staked on its platform will yield 9% APR and on top of that have LunaX as receipt token that can be used to farm liquidity pools. The power of liquid staking as the asset even though stuck when staked there is still a way to utilize it to earn more.

None of what I write is financial advice. It is for entertainment purposes only. Thanks for reading!