Decentralised Finance (De-Fi) has once again morphed into a new beast of sorts. The rate at which blockchain and De-Fi has been growing unhindered has been pretty impressive. No doubt a lot of what is occurring is trial and error but there have been gains a long the way.
The latest change in the sector has been delivered on Terra (Luna) Network with the exciting Nebula Protocol which I tried to cover some time ago but was not able to find much information other than "soon". Well today is soon and it is in the process of launching with airdrops being provided to Luna stakers.
Image Source Terra Swap
Do be cautious before running off and diving into this one as the protocol is only just launching and there isn't much liquidity on Terra Swap. It launched a few days ago so possibly a lot of the airdrops were dumped but even with that in mind there is currently a governance poll up and running for bootsrapping pool. So no doubt there will be opportunity to purchase the token in the not so near future.
Nebula is a brand new form of decentralised finance that morphs smart contracts, De-Fi, DAO's and ETFs into one place like never before seen. For many that don't know an ETF which is short for Exchange Traded Funds.
An ETF according to investopedia is a pool mutual investment fund that track a particular sector, asset or commodity known as a basket of securities. In Nebula's case at the start this will be a cluster of blockchain assets and tokens. But the project is open to other forms of ETFs.
In summary, Nebula protocol will be offering people the ability to invest into a cluster of blockchain assets in one place and it has a pretty decent way of creating those clusters.
Nebula Clusters can be created by anyone through a governance poll that will require other users to vote in favour of the cluster. If the cluster passes the vote than the protocol will establish a Cluster Token (CT) for that new cluster and liquidity will be established on Astroport which will enable it to be traded as any other digital asset on the blockchain.
Cluster Tokens there for are a share of a tracked asset such as Bitcoin or perhaps a group of assets and to help ensure the Cluster tokens are on par with the asset they are tracking an extensive AAM has been developed.
Two functions that support the Cluster Tokens value provide rewards for people who support it which are Create/Mint and Redeem/Burn which allow users to deposit underlying assets if they are undervalued or burn Cluster tokens if they are over valued. People who participate in securing the assets price are rewarded with NEB tokens which can be redeemed to purchase the Cluster tokens or sold on the open market as well as staked or used to establish new Clusters.
Nebular Protocol introduces a new form of De-Fi engager and enables a new form of investment in the name of Rebalancer. A rebalancer engages in rebalancing, minting, and burning operations against clusters. Users are incentivized to act as rebalancers in 2 primary ways:
Arbitration will also be a form of ensuring that Cluster tokens retain their value as liquidity pool providers will also be provided neb tokens to host pools across multiple markets enabling investors to participate in arbitration and price stability.
Image Source
As Nebula prepares to launch via bootstrapping the community is already eager to commence utilisation of the protocol with the first cluster submission open for voting which is a Luna and sUST pair that aims to bring more use cases to aUST and from the submission, simplify Luna and aUST investment.
aUST is the token you receive for depositing UST into Anchor Protocol and quite often sits in wallets unused with Loop Finance now allowing people to pair it with UST to earn rewards and Mirror allowing people to use it as collateral but also risks liquidation.
It is like a never ending rabbit whole you can provide bLuna borrow UST and then deposit it into Anchor and get aUST than use aUST as collateral to borrow for another asset. But one small market dip and you lose the lot so it is quite the risky move.
So I can see how Nebula Protocol will being a new dimension to trading and no doubt in the near future there will be a protocol somewhere on Terra (Luna) Network that will accept the cluster tokens as collateral for something else.
There is no shortage of De-Fi opportunities on Terra (Luna) Network and the advancement of Nebula Protocol is surely going to provide further investment opportunities.
If you would like to know more about the protocol you can read more at their official Medium follow Nebula Protocol on Twitter or join their Discord or Telegram groups for further information.
Images sources provided supplemented by Canva Pro Subscription. This is not financial advice and readers are advised to undertake their own research or seek professional financial services
