Hello and welcome to The Ether. Today is Friday, January 28th 2022. This episode of The Ether is brought to you by WeFund. WeFund is a community crowdfunding cross-chain incubator on Terra and it’s the first launchpad that implements a milestone funding release system to protect investors. All money raised for projects is deposited in Anchor Protocol and it’s refundable, and all decisions are based on community voting power. WeFund is community focused and designed to be a user friendly experience for both project creators and investors. Be sure to follow them on Twitter and join the Telegram for more information. Check them out online at wefund.app. This episode of The Ether is brought to you by Orbital Command, a community validator on Terra dedicated to educating expanding and promoting the LUNAtic community. Take advantage of their Terra Luna Intel Report on Telegram which brings you the hottest news and updates on all things Terra, find it using the link in the show notes. You can also support their community efforts by considering them next time you’re delegating or redelegating your LUNA. Find out more at orbitalcommand.io TerraSpaces appreciates the support of all our sponsors. Today on The Ether we have the LUNAomics’ Check In for the LUNAtics. Let’s take a listen.
So again, like this strategy works when LUNA… The assumption that LUNA is going to 10x, which I still hold. I think there’s so much FUD in the space regarding Anchor and LUNA and all kinds of… When the market goes down, everybody comes out of the corners that have any kind of doubt in Terra or whatever. And some people just enjoy rubbing salt into people’s wounds. So yeah, I guess people’s true selves come out when the market’s down. But yeah, I have the same conviction. I haven’t changed position. I had conviction and LUNA when it was $4 and just averaged in every single time my LTV dropped and went from 140 to 5 million in one year. So now it went from 5 million. I’m probably at like 1.4 million, so it is a huge retracement from the highs. It sucks to be down that that much but that’s the way it was in May. And I’m willing to take those kinds of pullbacks so that when we hit $1,000 that… My goal is to be at 100 mil. So these are the moments that will either make or break people. And I think that we could still get down lower. We’re at $50 right now, I think we could get down to $30. I don’t think that will get lower than the $30s, but I’m not predicting price anymore. I mean, I never tried to predict price, I try to respond to it. Because no matter what I predict, the market is going to do what it wants to do. So it’s much better to be like nimble and flexible and respond to what the market does instead of having this like, “The market is going to do this because I think it’s going to do it.”
Yeah. So yeah, I just hope everyone’s doing well. I know it’s painful. And I just wanted to… I just got off a call with my friend. His LTV got up to 45%, and his comfort level is 35%. So he called me this morning and wanted to know what his options were. So we just kind of talk through those options. And if there’s anyone that wants to ask a question or talk through what options are right now, I’m open to it. So maybe I’ll just walk you through what my conversation was with him this morning and then just open it up to any questions. I don’t have a lot of time, probably another 20-30 minutes. But I’d like to just make myself available to whoever wants to ask a question. So basically, my friend was 45% LTV. He wanted to get down to 35%, he had about 125 LUNA, liquid LUNA in his wallet, and he wants to know if it’s better to provide it, convert to bLUNA and provide it, or to sell it and to bring his LTV down. So I had him just do scenario checks. That’s what I do when I just want a solid idea of what my options are. So I had him go to Terra Station, and then go between Astroport and TerraSwap. To see what the spreads were, compare the spreads and converting his LUNA to bLUNA to see how much more bLUNA he could get. And then once he found out that he could get more through Astroport, had him go into Anchor and pretend to provide it. So you can go to provide in the Borrow tab, hit “Provide”, slide the bar to the amount of LUNA that you intend to provide, and then it shows you what your LTV will drop to. So if he converted 120 LUNA, he would get an extra three through Astroport. So he put that number into the Provide and he was able to lower his LTV to 33.
Then I told him to go to the borrow tab and to go to repay to to compare the two. And so he went to repay, and if he sold all of it he would have gotten 2500 UST or something like that, and then pulled his LTV down, or use that UST to repay his loan, and he could get all the way down to like 20% LTV, 23% LTV with a much lower liquidation price. But he said he didn’t want to go down that low. So the main thing that I told him was that his comfort level LTV was the main thing that should guide him, not the price. And if he wanted more gunpowder, that he shouldn’t provide the bLUNA because… It really depends where he felt the market was going. So he felt that he wanted to be able to be safe, all the way down to the $20s. So I said, if you feel like it could get down to the 20s, then instead of providing bLUNA, you should just have the liquid LUNA in your wallet. You don’t need to sell all of it. Right now you can just sell enough to bring it down to your comfort level of 35%. And then as we go down, then you can sell more to bring it down more. But he had enough LUNA to bring it down to well into the mid to low $20s if he left his liquid LUNA in his wallet. So that’s what he’s doing. And then later he said he forgot that he had another 120 LUNA in his Kraken account. So I told him just bring that over, convert that to bLUNA, provide that to bring you down to 30%. And then you have the extra 120 to leave as liquid LUNA to bring you even lower than $20 liquidation. So that’s what he did.
For me, I’m kind of all in bLUNA right now, I provided everything into bLUNA. My assumption is that we’re not going to go too much lower. So I actually provided all of my LUNA into bLUNA. I don’t recommend anyone else follow me and do that. But that’s kind of what I think, I don’t think we’re going to drop much farther than this. And if we do then I’ll just either eat the spread, and withdraw my bLUNA to LUNA and then sell it to pay down the loan. Or maybe just allow myself to be liquidated because I’ve been looking at Kujira and it’s kind of around the 4%-5% as well. So it’s not like how it was in May where it would liquidate you at 30%. So it seems like even in this 50% pullback, it’s not the same situation as it was in May because you have Astroport that’s adding a lot of liquidity. So the spread between LUNA and bLUNA is 5%, which is very reasonable, between 3%-5%. And there’s also Kujira that liquidates you at between 3%-5%, I mean from what we’ve seen so far. I think those spreads could widen and the Kujira bids could get much bigger if we have some crazy crash, which [chuckle] I’m hoping we don’t see. And I’ve kind of placed my bets that we’re not going to see that. But if we do, I mean, that’s just… We’re in a game of risk, so that’s what we expose ourselves to because we want to reward. So, yeah, so if there’s any questions or any input into that, we can just talk for a little bit. Yeah, Uniracer?
Yeah, I was just gonna ask what your thoughts were on the proposal to increase the LTV to 80% on Anchor right now, and how that might affect the strategy?
Yeah, I think that it’s an awesome… Everything is getting better, you have Astroport that’s narrowing the spreads between LUNA and bLUNA so that you can go in and out. You have Kujira that’s liquidating at very reasonable rates. I wouldn’t take the other side of that trade and put bids in for 5%. If I’m going to have my money sitting, I want 10%, or 20%, but it’s awesome that people are taking the other side of that trade for 5%. And that’s really great for people on the other side of the trade, like ourselves. And then being able to go up to 80% LTV, or not getting liquidated until 80% LTV, that’s huge. That just provides another layer of of protection. I personally… And I don’t think they’ll let you borrow up to 80% from what you told me in our DMs this morning. I think that’s smart. But yeah, it just gives an added layer of protection, I think, for us. So, yeah, if you can go to the Governance tab and vote on that, that would be great, whoever’s listening to this.
Henrique Sardinha 12:04
Yeah guys, I’d love to input if you don’t mind.
Henrique Sardinha 12:09
Hey guys, so hello, from Portugal. So all the way across the Atlantic?
Henrique Sardinha 12:17
Exactly, exactly. I didn’t suffer quite as much as you did. Because my acceptance level for the loan is at 30%. So right now, I’m comfortably at 40s. So that’s great for me, and I still have gun powder to go to the 20s if it’s necessary. But one of the things that I found very interesting about danku’s video today, and now that we are speaking about it as well, is the similarities of returns that we could have made if we chose to go through the landscape of going through the arbitrage between LUNA and bLUNA. And this project, now we’re seeing a 4% or 5% in each swap, which is very interesting, because in overall terms, it seems that the APR could be potentially higher than the LUNAomics strategy.
Yeah, I mean, I haven’t dove into the details of that. One thing that I was kind of thinking about dat I didn’t really understand was, with the LUNA-bLUNA swap, it goes back and forth between… Sometimes it’s non existent to, when you do have a crash, that it jumps up to 3% to 5%. I don’t think that you have the flexibility to choose when… For myself, I could choose either one, right, I could choose to put all of my LUNA and bLUNA into an LP pool or to swap it back and forth. But I wouldn’t be able to do that… I mean, maybe you could do half and half. But nobody knows when a crash will happen. And when you can take advantage of those returns. So if you look at the whole year, how many times do we have a crash last year? I mean, there was one time where the spread became really wide and the pool really profitable, but the majority of the year it was just headed up. And with Astroport and TerraSwap, and I don’t know if there’s any other AMMs that are gonna come online that’s going to narrow that spread. You we don’t have a crystal ball as to what the spreads will be and how profitable it will be to arb that. I think it would be smart maybe to put a small amount into that just to profit off of that arb when it does exist. But I think the assumption that LUNA is going to 10x is is much more… I would put much more money on doing a 10x-ing than that spread being wide the majority of the year. So I don’t know. But I do think it’s a legitimate strategy. I know Hutch talks about it a lot. And Cephii does it often.
Henrique Sardinha 15:14
I definitely agree with you, but I don’t think it’s only when it’s going down, I think it’s also when it’s going up. So it’s when there’s big shifts in the market. But just like you, I need to do some research on it as well. But it seems to be promising as well. And then let’s see what’s the new protocol, White Whale, that is also coming to LUNA shows because I think it will do that automatically. But let’s see in the future, and then compare all of those strategies with the LUNAomics strategy. And I think I’ve read somewhere that this is an ongoing thing right now, your strategy seems to be the most indicated one for the ones that accept this risk level. In the future can be another one. But let’s see.
Yeah, yeah, I’m completely open to that as well. I just, for myself, I think that, max pain, max pleasure. So this strategy, when it’s going well it’s just amazing, and when it’s going bad it’s just very painful as well. And I’m just the type of person that I’m okay with taking the max pain, because I want to subject myself to the max reward. And it is, I mean, it is a painful situation to be in when you’re down over 50% There’s not a lot of people that I think can stomach that kind of loss, and not consider options. I mean, even myself included, when you’re down this much, the first thought is like, “Well, what if I had taken all my LUNA out at $100 and and stock some away?” But you just don’t know, we could have gone from $100 straight to $150 straight to $200 like Solana did. And then what? So, I mean, my premise of 10x still holds, and I’m gonna… Whether I die on that mountain, [chuckle] which is definitely a possibility. I’m okay with it, so… And everyone’s risk tolerance is different. And that’s why I never… When I put that strategy out to begin with, I said, “This is my conviction in that assumption, and because I’m fully convinced of it, I’m gonna go 100% into the strategy and was willing to take the loss as well.” And, and I wasn’t ignorant to the fact that we could have pulled back 50%, 70-something percent, which is why I reached out to Ed Plaskow several weeks ago and said, “Hey, we should put together some sort of spreadsheet that we can actually look at concrete numbers of how to survive a 70-something percent pullback.” And I wouldn’t have done that unless I thought that that was a possibility and something that I would need to protect myself against and stay solvent, so that I could participate in the 10x run that LUNA will go through. But I’m human like everyone else and when something like this happens, and there is that 50% and could go even more to a 70% pullback, there is pain involved.
I’m okay with it. Yeah, 20x now, exactly. Yeah.
All right. We’ll move on to our next question. Tripleyak, you had your hand raised?
Yeah. Hey, guys. Hey, LUNAomics
Hey, how’s it going?
Good. I hope everyone’s doing okay, and not feeling too frazzled by this. I went through the crash in 2018 and what’s crazy is I was actually borrowing against my business at that point as well. So that was kind of a fascinating experience watching things go down from $19 down to $18, $17, $16 all in a day. And I didn’t realize I was using the LUNAomics strategy but with a bunch of alt coins that all were going to eventually go to zero. [chuckle] But that’s not what’s gonna happen here. But my question to you is I know that you said that you kind of believe that we’re not going too much lower, and so you’ve put your bLUNA into Anchor now, you’re reborrowing. But I’m just curious, everybody’s different but just for you, what are you looking at when you make that decision to take bLUNA and bond it in Anchor, or deposit it into Anchor Borrow?
I mean, there’s different ways for me to lower my LTV, one is to sell my LUNA, and the other is to provide it. And just with what’s happened with Astroport and TerraSwap and the narrowing of the spread, as well as Kujira. I mean, I was actually thinking about just letting myself get liquidated. And that sounds crazy but when I pulled up Kujira, and I was looking at where people were getting liquidated, they’re all getting liquidated in the 4%-5%. So to me 4%-5% is not that bad to get liquidated and put yourself back in a 45% LTV spot. So that was my reasoning. I actually, at the end of the day, decided that I probably don’t want to get liquidated and I’d rather be in control than let someone else be in control. And so I’ll probably eat the spread if I need to eat the spread, and just bring my LTV down there. But, yeah, that was my reasoning.
I actually think my question was a little bit different. So I’m just sitting on a bunch of bLUNA in my wallet. I don’t actually… I’m not actively borrowing yet, right. So I’m in the position where I’m still kind of looking for a bottom, so to speak. I’m just wondering, if you could put yourself in my position where you’ve got a bunch of bLUNA, you don’t have any outstanding debt, you haven’t actually actively…
Oh, geez. [chuckle]
What would be the things that you’re looking at? And I know, it’s different for everybody. But I’m just super curious because you’ve done this, now you’ve gone through a couple of these cycles, where it’s gone down, and then it’s gone back up. And I’m just really interested in what you look at when you’re about to go kind of like, “Oh, I really think this is a good time to take all this bLUNA and throw it in,” what are the things you look at?
I mean, if you took your bLUNA and threw it in, you would have still zero risk, because you’re not borrowing off of it. So, I mean, I would just, I would actually have it…
I’m looking at the arbitrage, though, as an option.
Okay, got it. Got it. I don’t know. I mean, if you’re just asking for me, if it was me, I’d have that bLUNA already in and averaging in, because I don’t see it getting way lower, again, take that with a grain of salt, because I respond much better to markets than I predict them. So I mean, if it’s my account the bLUNA would already be provided and I would be averaging in and waiting for a day of high volume capitulation selling, and then just go all in with a stop below the lowest point of the day. Normally, market bottoms kind of have that characteristic, where there’s just heavy liquidations, panic selling, large movement in price with a corresponding large volume. And then the large volume goes in both directions. So you have like, you know, tons of selling, it goes down a huge degree, but then it bounces back up closes, kind of near the beginning price of the day. And that price action normally, probably 80% of the time marks the bottom. And so what I would do is just go all in at that point, with a tight stop that if we ever got back down to the bottom of that day that I would flip my position and wait for another confirmation that we hit a bottom.
I think that’s my biggest concern right now is just the price action of Bitcoin. Because it doesn’t seem like Bitcoin has had that huge sell off and a ramp up in price. It’s just kind of drifting lower, or just holding its price. So there hasn’t been confirmation in either direction. So that makes me a little bit apprehensive of where the market is headed. And I think everybody is a little apprehensive of where it’s going, especially at the rate hikes and uncertainty of the bigger economy, the traditional finance economy. And I think on a bigger picture we’re in this transition between traditional finance and decentralized finance. And I think it’s years away, but I can kind of see the writing on the wall where maybe in five years or something, that decentralized finance is going to be independent and become uncorrelated with the traditional finance markets. I mean, just for myself, personally, as a retail investor, I’ve moved all of my money over from traditional finance to DeFi. And in the beginning, when I was just kind of dabbling in it, and the market would drop, I would move all of my crypto into traditional finance to kind of shore up my balances in traditional finance, but now that I’ve shifted over all of my money from… I mean, it was a process in the middle, when I started making more in crypto than in traditional finance, I wouldn’t dream of liquidating my crypto to put it in traditional finance. And now I’m just all in DeFi. And I think that that process is going to happen across institutions and, more retail investors, institutions. And then even central banks, maybe in the future, I mean, we’re seeing it in some countries. So it’s gonna be some time, I don’t know how fast it’s gonna shift. But it was interesting that there was a couple of days during this market downturn that it seemed like Bitcoin was decoupling from the S&P 500. So I haven’t seen that before in a crash. But I think that that’s kind of showing that that’s gonna be happening in the future.
Right on I appreciate the answer.
Awesome. All right, we got our next person is going to be Scott.
Hey, Scott. What’s up?
Hey, Shigeo, how are you doing?
LUNAomics. Hope everyone else on the call is doing well, surviving. So yeah, I’ve been managing my LTV. That’s probably the biggest takeaway from everything I’ve learned from you is the strategy is great but if you’re not being responsible with your LTV and not on top of it, and working hard at it, defending your position, it’s basically foolish to leverage. So yeah, so I’ve been sitting around 30%, and then it’s been just pushing up, pushing up, pushing up. I’ve paid a little bit down. I had some stuff in LPs. I pushed it back down. So I’m sitting at about $30 liquidation price. So I feel pretty safe. Yeah, I feel comfortable around 36%. And that’s pretty much where I’ve had it the whole time. And then I’ve just been kind of pushing it down to 30%. So I could sleep at night. [chuckle] Well, you wake up in the morning, it’s back to 36%.
Yeah, I just set my cryptocurrency alerting. And then when it wakes me up at night, I have a heart attack. [laughs]
I’ve got a new baby. So we wake up every three hours. And I sit over and I just I roll over and while the wife’s breastfeeding I roll over and I check crypto. [chuckle]
You’re already getting up. [chuckle]
Yeah, she’s my crypto alarm. But yeah, so one thing… And I don’t know I’m pretty new to all this. I have no experience in traditional finance. I got lucky, threw some darts at a dartboard at the stock market when 2020 hit when the markets crashed. Look at Bitcoin at $3,000, didn’t know anything really about it, watched it go to $5,000 and go, “Wow, what is this thing?” I’m gonna pay three grand, I’m gonna go buy me share of Amazon. It was three grand, that’s a lot of money. I didn’t know anything. And then watch it go to five and then nine and 14 and 19 and 21. I was like, “Holy shit.” Quickly too, like three months, four months. So it was quick. So then I started educating myself and finally, took forever, but anyways, I got into it.
Can I just say something real quick about what you just said? That’s the characteristic of these markets is most of the up days happen in a very short period of time. They say that if you take all of the Bitcoin rallies whenever it would rally hard, from a place of consolidation to 2x, 3x, it happens in the course of a couple of weeks. And so people that think that they’re going to time the market and get in exactly right before those two weeks happen after it’s been consolidating for years, or months, it’s very hard to do. And if you look at LUNA, it’s the exact same thing. I mean, If we took a whole year from going from $4 to $50, and then once we hit 50 in December, it went from $50 to $100 in a couple of weeks. And that’s the characteristic of the market, it will pull back and then do these consolidations for months, and then it will just ramp up super fast. And if you’re not already in it, and you don’t have a position in the token that you want a position in, it’s almost impossible to get it once it starts going. Because once it lifts super high, people are waiting for the pullback, and sometimes it just never happens. And then people get in at the very top.
Exactly. And I’ve been arguing with my brother, one of those good arguments, and we were talking about, when’s the right time to buy, and when’s the right time to get in. And with LUNA, kind of like that meme, right, 1 BTC is 1 BTC. That I think it’s always the right time, and then you just got to keep feeding it and keep defending it. And so Cephii, I’m a Cephii stalker on Twitter, and the whole logarithmic buying on the way down has been so far successful for me. I think what they do is Martingale bots and stuff. But for me, I just manually just increase my buys on the way down every certain percentage point. And that’s proved to work out well for me so far, until I run out of money.
Yeah, and I think that that’s probably the best way to get in is dollar cost averaging on the way down.
I had a question for you. So with the markets the way the macro is looking, I mean, it looks like zombie apocalypse is coming. And that’s kind of the fear of the market right now. My problem is, I don’t really have any fear. I just keep doing what I’m doing based on fundamentals. And so if I want to take a look, peek past the blinders and look at the actual macro, you say, “Okay, well, how do we survive? How does LUNA, how does our investment survive a complete meltdown? A 2008 times 10?” Until that happens, is holding LunaX or bLUNA liquid, so that you’re still earning, the right way, where you’re still exposed to LUNA, right? Is it LPs? However, if you’re going to run up another 50%, or 150%, from here, are LPs what you really want? Is there something you wait for Prism and then just stack your yLUNA? What’s that strategy to say, alright, well, I’ve got a rental property that is not paying shit, and I’ve already cashed out as much as I’m going to, and it’ll be 10 years before I can see what I can do in six months here in crypto in income. And so you say, okay, well, now you start thinking about, alright, just an LP by itself, typically, in a stable market, I mean, you could pay back whatever you get hit on taxes on a sale within a year. It kind of makes owning a rental property getting paid $400 a month, kind of futile. But then you look at the risks, right, versus something real stable, and a lot of people try to take crypto gains and put them into physical assets, not the other way around. So where’s that security? Where in your mind would be a place to… Other than obviously, the strategy of just LUNA, LUNA, LUNA?
Yeah. I don’t know. I mean, I think the way that you’re thinking through it is really good. I mean, I have a friend who has all kinds of businesses and some businesses do better than others. And then I just recently got him involved in crypto, and we had a talk a couple weeks ago, and he was saying that crypto has outperformed every single one of his businesses. But it’s so hard for him to make a mental shift in his head to put more energy behind crypto because he’s just done traditional businesses for so long, and he said that that’s something that he’s working toward. And it seems like you’re already shifting in that direction, but there is that security, it’s just not volatile, real estate’s not volatile, and you don’t have to go through these massive corrections that we’re experiencing right now. I think the thing that gives me just the conviction in it is I’ve seen the macro trend of decentralization, from governments to business, I mean, it’s across the board. And to me, it’s a trend that is unstoppable. And money and power is kind of the last frontier of decentralization, and we’re just in the beginning phases of it. So we’re super, super early. And I think that’s the danger is that someone could get too leveraged in at the top of this, that when there’s a pullback that they could get liquidated. But if you are getting in to decentralized finance in a responsible way and protect your downside risk, to me it’s a no brainer. It’s the future, it’s not… Nothing can stop it, it’s out of the box, and there’s going to be a lot of people that try to stop it, but you couldn’t stop the internet, and this is something that’s not going to be stopped either.
And so then it just comes down to what is true decentralization? It’s a decentralization of money, but when I look at protocols, and what they are decentralizing, what they’re providing a level playing field for, I can’t find anything that’s better than LUNA. And there is Bitcoin and Ethereum and different protocols. And I think it’s great to invest in all of them, but just from my user experience, and now I’m working with people in third world countries that I’m teaching them how to utilize Anchor Earn and different things, and they’re getting their friends into it, it’s something that I believe, is gonna change the world, and we’re in the very beginning stages of it. So I don’t know, my conviction in it is just super strong, and I’m in it for more than just the money. I think if it was just the money, maybe I would do other things, or different strategies as well. But I don’t know, for what I want to do, I’d like to see $100 million that I could manage to create education centers in different parts of the world. And so I’m trying to position myself for that. And if it doesn’t happen, it doesn’t happen. If it happens, it would be awesome. I don’t know if that answers your question at all. That’s kind of where my mindset is.
Yep. LUNA, LUNA, LUNA. [chuckle] I gotcha.
Yeah. So I’m probably not the person to talk to, about investing in other stuff.
No, I hear you. Thanks. I appreciate it. And I like everything you guys are doing, Cephii, danku, everybody, Uniracer, thanks for everything you guys do, because not having a paywall, and not having barriers to knowledge I think is the way to go.
Yeah, and I’ll be the first one to say that my way’s not the right way, my way’s not the only way. There’s tons of safer ways to to utilize LUNA and to capitalize on the trend. I just really believe that… And when I say 10x, 10x from $100 is $1000. I was in Ethereum when it was a couple 100 bucks, I was in Bitcoin when it was a couple of 1000 bucks, 4000 bucks, Binance when it was $7. I see these things move and see the technology that makes it move. And also the adoption curve, Cephii posts the adoption curve and the adoption curve of LUNA is faster than anything else that we’ve seen and the tokenomics of it, there’s nothing that comes close to it. The deflationary… Ethereum 2.0 will have a deflationary aspect to it, but nowhere near like what LUNA has. And so just in every aspect, I see that 10x, $1,000 LUNA is actually… It’s low. I can totally… I mean, we’re seeing a liquid circulation supply, if you take out the LFG capital that’s been inserted into the market, because they’re going to use that, but if you take out that 40 million, we have a circulating supply of LUNA right now that’s like 95 million. And you have 95 million from a billion a year ago. Bitcoin has a circulating supply of 21 million and is at 30-something thousand dollars. So, to think that LUNA can’t get to $10,000 I mean, I’m saying $1,000 and people are saying that, “No, it’s not gonna happen, that might happen in the next three years.” I doubt it. My conviction is it’s gonna hit $1,000 this year. Even if we’re at 50 right now, I think it could easily hit $1,000 this year, almost guaranteed by the year after. And in the next five years, $10,000 per LUNA is not out of the question.
I mean, if we’re already at 95 million circulating supply, and we don’t even have a Forex protocol out, we don’t have… The whole ecosystem has only existed for a year, I mean, what this ecosystem will be in three years, it’s gonna blow minds. And so when I say, surviving these dips, it’s surviving these dips for the chance to be a part of something that’s going to change everything. And I don’t think that $10,000… And I’ve heard Cephii say it, that $10,000 LUNA is not an over estimation of what LUNA can get to if the trajectory remains the same. So these times, I’m looking forward to calls that are much better than this. But we have to have these calls during times where there are crashes and there are 50%, 70% pullbacks, it just makes it that much sweeter when LUNA 5xs, 10xs, 100xs from here, but you got to go through these pullbacks to experience those highs.
I might make a quick comment, danku’s here and I think some of the guys that do some of the podcasts Panterra’s here, one thing that crystallizes your understanding of the thing is teaching it. So whether it’s me, or whether it’s Shigeo, or anybody, the reality is you’ll notice that it’s not just the folks that like to present these things that maybe have dug deep into it to understand it. When you show your family and friends how this stuff works, you just get a firmer and deeper understanding yourself. And I think that’s an important aspect of it. And what was missing in some of the early communities in crypto… Well, I don’t know if they’re missing, but the rate of growth is much faster now because folks are on YouTube and developing content much sooner in the lifecycle of the actual… Of Terra, for example. And I think that’s a big piece of why the velocity is higher now than it was back then, right. People have better access to content and knowledge. And like you said, a lot of the things that we’re saying here are basically being given away for free. And I think that’s a big part of why we’re growing.
Yeah, totally agree. And I think too, Web 3.0 is just a different animal, because we make all our money from what we do, not how many subscribers we get, or how many instructional videos we sell. We make our money through Web 3.0, which makes me really skeptical of people who sell Web 3.0 stuff. Because I don’t know, I mean, why do you need an extra couple $1,000 when you could be making hundreds of thousands, millions of dollars utilizing Web 3.0? So I think exactly what you’re saying is great that we’re in a unique position that all of our financial needs are taken care of. And we can just give information freely so that other people can benefit from it as well. And hopefully it affects the culture of generosity and the Terra ecosystem that everybody will be… I’m so stoked to see people come together, like Orbital Command put a Discord channel together, tons of people jumping on that Discord, and Uniracer and others just helping people out. And it’s just an amazing thing to see how generous and willing people are to give up their time to help other people understand this ecosystem and how to make it better and even the willingness of Nexus Protocol and different ones to say, “Hey, let’s work together and put something together that helps people in this ecosystem manage their risk, but still get rewarded for it without knowing how to program a bot.” We’re a part of something so special, and I think it’s cool to be a part of.
Couldn’t agree more. Alrighty, we’ll bring our next speaker on. Ryan, you’ve got a question?
Yeah, thank you. First of all, yeah, thanks so much for doing these calls, and to the guys putting on the Discord and managing the Discord, and it’s almost fun to go through all this with everybody in there. I think we’re all stressing the hell out and watching everything go. But it’s the community vibe is very real in there. And the education happening is monumental, I think. So, I think the question I had for you was whether or not… Do you even look at your cost basis, or average cost per LUNA? I’m just kind of curious. I know for me, kind of being an amateur and as we get down and dipping lower and lower, I’m like, “Oh man, look at this price point, if I can get more at this price…” I’m wondering if you even bother looking at that, or if you’re just like, “Screw it. I’m just looking at that count of total LUNA.” So I’m just curious if you’re keeping track of that or not.
I am not. I would say that probably danku knows more about my portfolio than I do. [chuckle] Yeah, the main thing that I look at is the total amount of LUNA that I have and my LTV. That’s kind of the only thing that I… And maybe that’s dumb. Maybe I should know what my cost basis is, and everything else. And normally I do, but I don’t know I just… Yeah, it’s just been LTV and the amount of LUNA.
Well, and it doesn’t help that we don’t really have great tools for keeping track of that. Yeah. Because you’d have to kind of import it and all that, as opposed to other platforms that sink well into those portfolio management things.
Yeah, I can’t wait for Papi’s thing to come out. It’ll make taxes so much easier. Hopefully.
All right. Well, thanks. Thanks for taking my question, appreciate it.
Great. All right. Next speaker. Next question we have is from Alex, he has his hand raised.
Yeah, how are you doing? So this question kind of correlates to the last one that was just asked regarding taxes. My question is, I’m in the states too. And I was wondering if you had any avenue regarding if you set up an LLC under your name, or just any other strategies to legally reduce how many taxes that you’re paying when it comes to a point, 5, 10 years from now, if the IRS could potentially see what transactions were being made? And then also, if you had a recommendation for any accountant or any firm similar to that?
Yeah, I’m not there yet. I’m exploring. Right now I have several businesses that I can deduct losses on certain things that will offset the gains in crypto. And because I don’t sell a lot of LUNA and the LUNA that I do sell is my liquid LUNA that last one in first one out, I can take a very small capital gains or capital loss on those trades. It doesn’t really have a huge tax burden on it. And I try to keep it like that. It’s one of the advantages of just never selling your main stack of LUNA. LLC wise, I’m probably going to do that in the future, but my accountant has recommended that I don’t, yet. But it’s a really tough thing. I mean, I spent probably three months in the beginning of this year looking for accountants and I took the beginning or the first quarter of 2021, looking for an accountant, because I saw what was coming for that year. And nobody knows. The IRS doesn’t even know how to handle all of this DeFi stuff. We’re on the bleeding edge of crypto, and they’re just figuring out the classification of Ethereum. I mean, I think Hutch would probably be the best person that I’ve talked to to make recommendations. For that I’ve gone to Polygon. Right now I’m going through Koinly. It seems like Koinly has in my experiences been able to import the CSV files for Terra better than any other platform that I’ve tried. But yeah, I’m probably not the right person to give you solid advice for that.
All good. Thank you. Appreciate the advice.
Henrique Sardinha 51:08
Guys, just for what it’s worth. If anyone is reconsidering relocating, here in Portugal there’s no capital gains on crypto. So we’re still on the safe haven over here.
That’s awesome. Yeah, I think when my kids graduate, I’ve had conversations with Hutch about it, that when our kids graduate, we’re going to move to Portugal and buy a house next to each other or something. [laughs]
Henrique Sardinha 51:34
You got to do it. It’s amazing here. So you’re more than welcome.
Awesome. Awesome. Are you originally from the US and you moved there? Or are you from Portugal?
Henrique Sardinha 51:44
No, I’m actually Portuguese.
Okay, okay. Yeah, that’s cool. Is the income tax? I heard the income tax is high.
Henrique Sardinha 51:52
Yeah, I mean, so, thing is if you have salaries here, the income tax on your salary is high. If you have companies, the income tax on a company is 25%. Right now for crypto, there’s no taxes applied. So that’s why a lot of crypto projects and companies are establishing this themselves here. We have the Solana conference last November. So there’s a lot of things happening in Lisbon precisely because of that. And in even here in Europe, a lot of the crypto movement is here in Lisbon. And I mean, it’s the weather, it’s the cheap prices everywhere in terms of housing, and just the lifestyle. It’s amazing.
It’s really cool.
Now that you guys got me dreaming about Portugal, we’ll go on to the next question. LunaRick, you have your hand raised.
Hey every one, back to that whole education thing. I mean, the no barriers to entry, and getting all this quality information from the likes of you, Cephii, danku, from the community we’d like to thank you guys for that, because it’s really one of the big reasons we’re all here. So I mean, thank you again. What was gonna ask you? I kind of have… Well, I have three wallets. I have more than three wallets, but I have three wallets right now. One is mainly for DCA, another one’s mainly for following Cephii and then arb-ing over there, and then I have my LUNAomics wallet and that one I kind of got lucky. I had to disappear for a… Well disappear, I had to go somewhere with really bad reception and I didn’t want to risk it, and before the market really started to go down, I went down all the way to like 10% or 15% of my LTV. So I’m chilling right now. But I do have a loan that I just got and then bringing that on-chain soon, too. And I feel like right now, would you feel more comfortable still with the stacking strategy? Or do you think that in this kind of market the LP strategy might actually be better if you’re just trying to stack LUNA here? Obviously, there’s pros and cons to both of those. But if my strategy just like you is stack as much LUNA as possible, are you still have the conviction that strategy is the way to go?
Yeah. So I mean, when I look at the current market conditions, one of the things that I do is I look at it from the all time high, and then have a perspective of risk versus reward. So right now we’ve pulled back over 50% from the all time high. And the deepest retracement that we’ve seen was the one in May with cascading liquidations and it was like a 79% pullback. Now with Astroport and TerraSwap that provide smaller spreads… The spreads back then were 30%. It was crazy, it was 30% and then people were getting liquidated at 30%. And then the people that were liquidating others and getting a 30% discount, they were taking the discounted LUNA that they had gotten and dumping it back on the market to lock in their profit, creating even more selling pressure. So all of those things… And then with Anchor Borrow, in the process of going to 80% LTV before liquidation, there’s just a lot of things that are stabilizing the ecosystem that didn’t exist before. So 79% pullback back in May, I kind of look at that as the max. And right now we’re at 50%. I don’t see… The downside risk, maybe another 20%. But the upside reward from where we are right now is 10x, 20x, from here, so when I compare a 200% return to the upside, and a 20% risk to the downside, I wouldn’t be doing LPs here. That’s just me. I’m not saying that that’s correct, or that’s what anyone else should do, but for myself. When you do put your money in an LP there is that impermanent loss of your LUNA when it’s going up. You gain the LUNA when it goes down from the impermanent loss, but you actually get less LUNA as the price goes up. So I mean, you do have the rewards and the rewards offset that a bit and then you gain UST that you can use to purchase more LUNA. So it’s not as bad as you think it is. But still, if there’s a 200% potential upside reward, and a 20% downside risk. I would rather stack and, but you’ll hear me say that in every scenario. [chuckle]
That’s not helping you and me today, thank you so much. [chuckle] So I’m sitting on a lot of bLUNA, which I imagine a lot of us here are right now. So I mean, it’s just food for thought.
Alrighty, thanks. The next question that we have is from Flaco.ust.
Hey, guys. Thank you for taking my question. Kind of asked a few… I’ve asked around a little bit. My question was regarding bLUNA and LUNA because I’ve sitting on a stack of LUNA and I’ve been trying to convert. And my only concern was I was reading as far as the slashing event, that’s something that I don’t 100% understand. I know they said there isn’t really… Well, the people that I’ve talked to in the community, there isn’t really much risk when you do LUNA to bLUNA, other than that 21 days that sucks. But I found to my surprise, the slashing risk, is that’s something that’s I should actually be concerned about or is it pretty much safe to do LUNA to bLUNA? Because last night, I saw it at 5%. And I kind of missed the opportunity because I didn’t want to pull the trigger. So just wanted to know your thoughts on that if you can answer that question.
Yeah, and I’d open that up to anyone else, because I’m probably not the right person to ask for that question. I haven’t staked just because I don’t like the 21 day hold, or I don’t like any kind of lock on my capital, I like to have everything liquid so that I can pay down loans very quickly. So I do put bLUNA into Anchor and borrow off of it. But I keep everything liquid, and if I ever have to take stuff out I’ll do an instant burn and then eat the spread. But I don’t even instant burn things anymore. I’ll just withdraw the bLUNA and take it over to Astroport because Astroport has a smaller spread. So as far as slashing risk, I have never heard of anybody experiencing slashing risk. But that’s just me. Maybe there’s people in this group that have experienced a loss from slashing due to the staking, but I’ve never seen it as a big risk. Yeah, if there’s anyone else here that can talk into that.
Appreciate it. Thank you.
Alrighty. Next question. Next speaker we have is Nikunja? Nikunja, I’m sorry if I mispronounced it.
Nikunja bd 59:28
Hello. Hi. Okay, first of all I want to thank LUNAomics because he’s here. He put out this strategy. And now he was tweeting all the time. And now he’s here in the Spaces to come down the guys. I come from… I’m from Argentina, which is a country which has 50% inflation and these LUNA tokenomics and this strategies have huge opportunity, life-changing opportunity for us here, so I was implementing it. I was lucky to enter back in July when LUNA was like…
I think we lost them. Can anyone hear me?
Yeah, no, it looks like I think we lost him. Cuz I can hear you. Yep. I think we lost him. Okay. It’s okay. Let’s go ahead and go to our next speaker until that person requests. D, D, you have a question, Danny?
Yeah, thanks. Let me just… Okay. So a couple questions, actually. I’ve been holding LUNA for a little while, but actually wLUNA, which makes me feel like a complete idiot given that I can’t, or that I haven’t really benefited from the protocol. But I know how to bridge but is there a way to easily purchase a native UST anywhere?
Nikunja bd 1:01:10
So the thing is, I’m very happy to hear that you want to push an education project. For me right now I’m 60% with this leverage, I think I have like 60% more LUNA than when I started. And I have provided like 45% as bLUNA and I have 15% liquid to manage. I have like dry powder until LUNA price of $21. So I think I’m okay with that. But I’m happy and very enthusiastic about this great community here, I can see danku, Uniracer, Cephii, all of them are putting so much information, so much education. And I’m a physician here, I’m a doctor. And I also want to use this money, I can make with LUNA to push also an education project. So I will send it to you LUNAomics so you can read it. Maybe we can work together in the future. I teach at the university and think that education between children from 10-17 years old is the way to, to change things in the in the world. So I am more than happy to hear that you want to push an educational program. And thank you very much for being able for all of us. You are very responsible, put putting away the strategy. And you’re always with us, and I want to say that thank you very much.
Awesome. I’m DMing you right now. Yeah, just send me a message. And I look forward to working with you. That’s awesome.
All right. We’ll bring it back over to D, sorry about that, Danny.
No, no problem. Thank you. Alright, so I understand that I can obviously bridge my wLUNA, which I will probably do at this point. I’ve held it for a long time. But I think that’s the time I just always panic and freak out that I’m going to mess something up due to the size of the decision. But the question I have is for UST is there an easy place to purchase native UST without having to go through the whole bridging process? That’s the first question. And my second question, if it’s okay, is is there a good way to see how the deleveraging from the Abracadabra protocol is going? I’ve been following the Wonderland stuff, basically their portfolio. But is there another way to find this or to figure it out? Because to be perfectly honest with you that has been perplexing me for actually longer than even the recent events. So that’s basically the only thing I hate about, I dislike about LUNA at this point is I just don’t like that strategy. It bothers me. So now that I know that it’s deleveraging, I’d like to know how I can actually follow that type of progress.
Yeah, I’m not sure I haven’t followed that. As far as UST I think the easiest way, the way that I do it is I just purchase… What I’ve had to do in the past because I live in Hawaii is the only exchange that I have access to is Kraken, so I’ll use Kraken to buy Bitcoin send bitcoin over to KuCoin, flip Bitcoin for LUNA and then send LUNA to Terra Station, my Terra Station wallet. But now Kraken has provided LUNA and you can buy LUNA straight from Kraken. And it’s native LUNA, so you can… If you want to open up an account with Kraken, that’s super simple. And you can buy LUNA there, shoot it over to your Terra Station wallet and then convert the LUNA to UST if that’s what you’re looking for. As far as Abracadabra, I don’t get involved in stuff that I don’t understand, or there’s a lot of hype behind it. So I never got involved in TIME or the degen box or OHM or anything that I don’t understand. And for me, that’s a lot because I don’t like to jump into and fracture my attention into a whole bunch of different things. I like to look for what I think is the most profitable and then kind of put my energy and time behind how can I do it the best and management my risk the best in that. So I don’t know if there’s other people in here that can feed into that. I’m not the right person for that. I think the question was, where do you see the analytics for the deleveraging of the dgen box?
Yeah. Basically… And thank you for answering the Kraken part, I’m just curious about. So yes, just to reiterate that other question is essentially just to assess the risk to the protocol, which so far I think it’s held up fairly well except for the price. But I just saw a tweet from MIM Spell saying something about the bridging ETH to Anchor is currently down, and we gave them 10 hours to fix it. And, quite frankly, I just don’t like the players on that team, obviously. So I’m just trying to pay attention before I lose my mind, essentially.
Yeah. Yeah, I’m not sure if there’s anyone else that knows a source of analytics to look at that. Feel free to say something.
Flipside cCypto, said they’re doing an analysis on that right now on the Anchor AMA.
I’ll take another question. I have a meeting that I’m actually late for but if there’s… Hey, danku is requesting. [chuckle]
Yeah I’m already on it. [chuckle]
Awesome, awesome. Seems like there’s a problem connecting.
Yeah, it looks like all right. All right. Oh,
Paul Gomes 1:07:54
I’m sorry man. I got a question. I’ve been actually doing the strategy that you guys are actually talking about. How about the pools? Is it a good time during these times to get into pools, to getting those rewards? What’s your strategy on it? I’m using Astroport as well.
Yeah, I think that the pools are super profitable right now just because there’s high volume. If you’re already in the pool and the price went down you should have picked up a bunch more LUNA especially because the fees generating right now are huge. Would I jump in now? For me, no, I wouldn’t jump into the pools right now. Just because I think that the upside potential is much greater than the downside risk from where we are relative to the all time highs. So for me I’m more interested in stalking right now than LPs.
Paul Gomes 1:08:53
Okay, that make sense. So just grab more LUNA, do the double loop on it, right?
I don’t recommend people to loop. I don’t recommend people to loop. I recommend people to use borrowed money to purchase LUNA, and that’s part of the strategy but I don’t recommend people to take the LUNA that they purchase, convert it to bLUNA and reprovide it. There’s just too many complications when the market does go down, different spreads that you subject yourself to, and liquidity issues and all kinds of stuff. So I personally don’t recommend looping. I have looped and I do loop once in a while, but I don’t recommend people to do that unless they really know what they’re doing. And I’ve shared multiple times on my Spaces that it’s not the best idea to loop unless you know how to unwind that. But then you subject yourself to things you can’t control, like the LUNA-bLUNA spreads, as well as liquidation and stuff. So if you do loop, be very careful, and I wouldn’t recommend it right now, just because the spreads are so high, so I don’t know. But honestly, I…
Paul Gomes 1:09:10
No, that makes sense. Yeah, thank you so much.
Yeah. On the flipside, I’ve heard Cephii talk about how he looped at the end of the crash in May. And obviously, that turned out really well. [chuckle] So it’s really, I mean… There’s no hard and fast rules on it. But if you’re experienced, you can do it well.
Paul Gomes 1:10:46
Well, thank you so much, man. It’s been insightful. [chuckle]
Hey danku, what’s up? Let’s close with danku.
I don’t know if I’m the one you’re closing. But I haven’t hopped also earlier in here, because Jaser invited me because I was preparing dinner because I’m getting some friends here at home, and they’re arriving in four minutes so this is just perfectly for me. Because first of all, I wanted to say a big shout out to both of you for organizing this. I just enjoy so much seeing 400 people of the Terra community coming together and just asking question, this is so amazing. You talked about this earlier, right? Kind of sharing free information. And thank you for the different shoutouts you gave to me even if I’m a stalker of your portfolio, right. [laughs]
I had a lot of fun doing this and all the data points. And no, it’s cool, right. There are so many ways to Rome. I don’t know if you say that in English, but In German you say that. I just quickly wanted to also share informations on the degen box, because you asked right, if somebody can can share some insights, because I’m of course looking right now into Anchor Protocol at the Earn side. So if somebody is interested to understand what is happening on the degen box side, you just need to go on Google and search for “degen box Ethereum”, and then you will find the smart contract and what you can do there, if you click on the smart contract, they more or less plan to have 10% in UST, right. And right now they have basically no UST left. So if we really do the math, based on their own expectations of having always 10% of UST in the degen box, they basically have nothing more in Anchor, which you I think see at least reflected that we lost almost 1 billion in UST over the last day. But that’s great, because our yield reserve is just recovering. [chuckle] So I think this has been the biggest stress test ever for UST yesterday, and it hold it up like a king. And everybody who is like you also LUNAomics, focusing on leveraging in terms of putting down collateral, it’s good for Anchor, right. So also, we should not forget that, right. Because it’s a big part of the whole ecosystem. So I think it’s working out in both ways.
Yeah, and I think with Anchor version two, they’ve talked about their intention of adding a ton more different tokens that you can collateralize, which will also add stability to the protocol. So lots of good things coming up, the 80%, more tokens being collateralized. And there was something else that was… Oh, before I go I’d like to… There’s a lot of people that are sharing their fear over the yield reserve for Anchor and I was sharing in the Discord yesterday that the way that I view what’s going on, and Anchor actually came out and said their strategy, it mirrors the early days of Amazon where Amazon wasn’t taking a profit for many years. And there’s a lot of people during shareholders meetings that would voice their concern that they were losing money every quarter, but they’re actually putting a lot of their capital and the capital of shareholders into expansion. And big business mindset is that you go for market share, not for profitability, especially in the beginning days. And you can see that with Google providing free email, Facebook providing free hosting services for all of the pictures and content that people use on their social media platform. And what people are trying to do when they think big in the long term game is you want to capture as much market share as you can and pay through the nose to do it. And once you have the majority of market share, then you have the flexibility to do whatever you want.
And I actually look at what’s happening with Anchor and the yield reserve and them funding this 20% yield as a testament to their long term vision and their desire to capture market share and do it quickly. And they actually have the capital to do it because Terraform Labs and the way that they distributed their tokens in the beginning and the price of the tokens now. So I think that Terra is in such a strong place to succeed, not just because of the way that they initially formed and distributed their tokens and now have a huge war chest to fund all different kinds of things, but because of the leadership of Do Kwon and the long term vision of the team. And you can see just the past performance of Anchor, I mean, what they’ve done in the past year is just incredible, and second to none in any protocol that exists out there as far as saving and yield. So there’s a lot of people that are bringing up concerns of the reserve yield, and that is unsustainable, and I kind of look at it as a positive. And it’s so mirrors what Amazon has done and a lot of these FAANG stocks have done in the past. So that’s just my input on the Anchor FUD that’s been going around recently. Any last words? Does anyone else want to say anything before we close up? Thank you, danku, for that input on the degen box. That was super helpful.
Yeah, my pleasure. And thank you.
Thank you so much to this incredible community and to you, LUNAomics, and to everybody here. This is the best community in crypto. It is awesome to be part of this.
Awesome. Alright guys, have a great day and don’t stress too hard, especially if you’re leveraging, just manage your LTV and be cool. It’s going to pass and we’ll see $1,000 LUNA at some point. All right. Have a good day guys.
Thanks for checking out another episode of The Ether. That was the LUNAomics Check In for the LUNAtics. Recorded on Friday, January 28th 2022. This episode of The Ether was brought to you by Luart. Luart is the first gamified NFT platform built on the Terra network. Luart provides a seamless minting and trading experience all while earning you rewards just for being a user. Be sure to follow them on Twitter and join the community and Discord for the most up-to-date news and announcements regarding all the hot new NFT launches, platform upgrades, and new projects hitting the secondary marketplace. Are you ready to #PutYourHelmetOn and join the movement? Find out more at luart.io.
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