Hello and welcome to The Ether. Today is Thursday, January 20th 2022. This episode of The Ether is 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. In the coming weeks make sure to follow their Twitter and Discord for updates on all the new launchpad collections. dystopAI minting on the 20th, that’s today in like an hour if you’re whitelist. The team also recently updated a few performance features as well for an improved trading and minting experience. Find out more at luart.io TerraSpaces appreciates their support. Today on The Ether we have the Stader Staking Weekly Space hosted by Cephii and Stader. Let’s take a listen.
Good morning, everybody.
So I think we can get started. I think people will slowly join in, because we are also putting a time limit to this, right. So let’s take in all the questions, ‘because people have questions, so we can take it on. I think we’ll just give it a minute. I think Cephii is having issue connecting.
Hey, guys. Hello, everybody.
I seem to be having a little bit of connection issue. So I was kind of ironing that out. So hope everyone can hear me?
Yeah, we can hear you. There’s a bit of a glitch. But I think we can hear you.
Yeah, I think the… I’m in a place where the weather is not so great. So I’m not sure how well the audio is going to come through. But we’ll see how things go. Is that reliable enough the way it sounds now?
Yeah, I think it’s pretty decent. Yeah.
I should probably get close to a window or something. So I’m around a lot of buildings, like snow and whatnot. So there’s…
Oh, you mentioned you’re traveling to DC. Are you still in DC?
Yes. It’s kind of… Yeah, it’s really like… The weather’s kind of bad. And it’s kind of hard to get a good connection. But let’s see how it goes. Okay, good morning, everybody. I know some folks said it was kind of a bad time for some people, because I think it’s a weird time for a lot of different time zones. But right now, we’re at eight Eastern, seven Central, which makes it pretty early for the people on the West Coast, at least, US time. But anyway, we’re going to talk today with Stader and cover some different subjects that perhaps we did not before. I think everyone knows, hopefully, what Stader is by now, but what they do is essentially provide simple staking solution for folks, and simultaneously provide some autocompounding benefits to LUNA and UST, and dust stablecoin ejections that come off of your LUNA. So for the average person, I would say right now those are the two primary functions. We’ll talk a little bit about maybe the difference between just straight staking with a validator pool of curated validators versus using the LunaX liquid staking system, both of which are a little bit different. And I’d like to kind of go into the future today, as far as what kinds of strategies and what kind of potential applications and composability that end up being available due to the use of Stader.
So for starters, if you guys have noticed, one of the pages on their website now includes things like strategies. And there’s not much there yet, and perhaps the team will kind of expand on maybe some of the strategies they are thinking of, and then in the future, there may be strategies built into the staking yield direction that the team has maybe been dreaming up for the future. And then some that maybe the community can also come up with in the future as well to provide suggestions to create combinations of various investing products. Another general subject area I wanted to touch on was the cross-chain future of Stader and what that means to the Terra community, what that means to possible investing strategies that may emerge as a result of the presence of cross-chain assets on Stader, and maybe a little bit about how the dynamics of that will work in terms of Stader’s either presence on other chains or bringing folks from other chains into the Terra ecosystem. Now I think we have Amit here, we have Dennis here, and who’s our last host here that’s running the show? I think are you have got a lot of echo in your room, I believe. No, I was asking who are all our hosts today? Maybe everyone can introduce themselves.
Abram and Dennis work in our marketing team.
Okay. So, you guys want to start with maybe future strategies first?
Absolutely. Thanks a lot for the nice introduction, Cephii. Always a pleasure to join the discussions with you and fellow lunatics here on Twitter Spaces. I see that danku is here and several others are also here. Great to have all of… Talking about… So, today I want to cover broadly about the near term strategies as well as interesting products that we are bringing to the market which kind of add a lot of value to the Terra ecosystem as well as to the delegators. And of course, as Cephii mentioned, we’d like to touch upon our cross-chain plans and what we have been building so far, when it comes to several other blockchains. Now, specifically talking about some of the strategies that we are implementing on the strategy space, of course, very open to suggestions here. One of the first thing that we will have soon is the… I think Cephii probably coined this term, this is a yield redirection strategies on top of staking rewards. We see a future where staking rewards are probably going to be 15%-20% or 25%-30% as adoption of blockchains increases as well as the transactions on the blockchains increases significantly. So yield redirection on top of staking rewards will probably be massive. When we look at the overall crypto economy growing too few trillions of dollars and staking growing to, again, trillions of dollars, staking rewards itself can be running into hundreds of billions of dollars. So literally people can build hedge funds on top of staking rewards. So, basically taking that long term view what we are, in the short term, building, are very simple yield redirection strategies on top of LUNA staking rewards, like the stakers who are staking with us can actually look to redirect a portion of their yields to protocols like Apolo DAO or Spectrum Protocol. Or they could say that, “Hey, I want to convert 20% of my LUNA staking yields to stables and automatically deposit stablecoins, UST, into Anchor Protocol while earning 20% deposit rate on Anchor.
So these are several interesting yield redirection strategies that can be built on top. Obviously, some of the exciting redirection strategies could actually be one we can potentially use LUNA staking rewards to direct to Pylon pools or for that matter any of the lock up on Terra or use the staking rewards and redirect them to play interesting games like betting or prediction markets. So here’s why these are some of the possibilities in the short term, for a month to two we are building redirection strategies on top of Spectrum or Apollo, and potentially Anchor. Expanding this potential future strategies now, if you want to redirect the staking rewards to several… If we’re expanding that to cross-chain world where we can potentially redirect the staking rewards into buying up several other proof-of-stake assets. So that those are all the possibilities on top of yield rredirection. Do you want to cover anything else, Cephii, on this particular topic? Well, I’m sure you have some interesting ideas that we can learn about.
Yeah, I was just kind of dreaming, dreaming up different sort of ideas to put together. I think for starters one realization is, is that really just not all crypto’s the same, and that it’s not important to have exposure to all crypto at all times, number one. So the key element in proof-of-stake assets, is going to be trying to find potentially the most highly liquid and most useful proof-of-stake chains to add to the system. The second thing is, well, part of that is the realization that basically, a lot of other proof-of-stake yields outside of Terra are inflationary yields. And because they’re inflationary yields, an important feature of those chains has to be very high adoption growth, in order to make both the yield output earn something as well as the coins themselves rising in value. So I think as long as we’re in the adoption phase of crypto for the next 10 years, and we have assets that are going to be adopted and rising in value, other things to be kept in mind is that some things have very, very high inflationary yields, and the potential for those assets is more related to yield than necessarily principal growth. And other things like LUNA are very functionally deflationary. And the yields are not inflationary, so the growth potential is much, much higher.
So, mathematically, you look at that from the perspective of strategies. So you can technically get different asset class exposures, but they’re just not all treated equally. In other words, I don’t know that I would necessarily personally go and put equal portions into each of these things necessarily, even if they were available. I think some strategies will emerge based on the various yield rates and growth potentials that people think the different assets have. An area that I was kind of watching was, okay, so we’re gonna have an AMA, for example, with Prism this evening, which some people would argue is a competitive dictator, but not necessarily. An example scenario would be, so for example, let’s say I have my LUNA staked on Stader. And one of the things I was envisioning was, alright, in the future, we don’t know exactly what the yield value of yLUNA would be. We don’t know exactly what the principal value of yLUNA would be. But my thought was the two of them should approximately equal one LUNA. So a strategy could be developed whereby let’s say, for example, LUNA’s yield is then being directed to investing into say, for example, whichever one is cheaper at that moment, yLUNA or pLUNA, and then you may be able to get an optimized dollar cost averaging. And then when the conditions are optimal, you can convert the yLUNA and pLUNA over to, say LunaX or simple staking.
So there’s some interesting possible scenarios where you continue to get primarily LUNA exposure without necessarily having to buy some other coin, but then you wind up with maybe some optimized solution from the yield redirection that might be a little bit better than just simply straight, automatic recompounding. So there’s some theoretical possibilities available to us there. And then you can use your imagination, for example, let’s say for the next couple of years yLUNA’s output is high, the yield could be redirected to buying yLUNA, but then the yield that comes back from that goes to simply going back to buying LUNA. This way you wind up with less of the, say, yield risk exposure and go back to traditional LUNA exposure. So there’s a lot of little magical concepts that can be built around these things that I think is going to be interesting from the perspective of just diversifying the basket of strategies and perhaps, opportunities for people.
And it’s not to say that any one of these things will be the best thing in the universe. I think depending on market conditions, you may have all sorts of different ideas about what a person might speculate as the best option for them. Other things I was thinking of with the yield redirection concept is like Amit said, you could basically direct yield to buying other assets, similar to how Pylon gateway works, for example. You could dollar cost average into something, for example, I use some yields today to buy Anchor token while it was low, because well, it’s low. And the idea is, is that I could ride the speculative price action up at some point when the price moves upwards. So there’s just some interesting concepts that can emerge from yield direction that might net ultimately, potentially better outcomes than, say, for example, simply redirecting back into LUNA itself immediately. So, Amit, what’s the roadmap for the establishment of say, for example, ATOM, or Solana? And what kind of things have you guys been thinking about with other chains?
Yep, sure. It’s quite interesting, Cephii, I just want to… Let me actually cover a couple of major products that we are releasing over the next one month, and then I can move to how we are thinking about the cross-chain expansion.
So one of the… I think this came up in one of our earlier discussions, Cephii, where you mentioned that one of the important things that we need to consider for decentralization is actually, each of the pools have each of the validators also get the flexibility to offer autocompounding and simple one click airdrop claiming. We kind of took it very seriously. We are just about to launch that solution within the next one or two weeks. What that means is, each of the validators can actually take our contract, get that contract to delegate all of their delegators delegations to their single validator, yet offer all the features that are possible with Stader.
So what you’re saying basically is right now, there are several pools on the site, the Community Pool, the Airdrop Pool and I think the professional high efficiency pool. And what he’s saying is, is that people wanted the ability to do staking with single validators also. So they’re sort of bringing that capability in the name of decentralization, so you still get the autocompounding benefits, but don’t have to get locked into, say, an arbitrary pool of validators, if you like, for example, PFC, or whoever, then you can basically pick them directly as time goes on here. Now, Amit, how many different validators are going to be available on that? On the single validators concept?
Absolutely. We will do a phased launch with that. Initially, we will select about 5-10 validators in the phase one. And then once we are completely comfortable with the operations, of course, all our contracts are audited, but we need to also be comfortable with operating these smart contracts. So phase one will be 5-10 validators. And after phase one is completed and successful, we will roll it out to potentially every validator that is out there on Terra.
Okay, great. Yeah, so that kind of addresses some community concerns regarding basically decentralization. We don’t want too much curation of pools, because if that happens, you wind up with, one, you get pools that may get too much money without having to really deserving it. On the other hand, you may have other pools that get too much centralization, who perhaps deserve it, but also at the expense of decentralization. So, the centralization/decentralization argument will always be there. And maybe a possible yield redirection scenario might be that you in the future might be able to stake on one pool, but then when you do the yield redirection, it goes to something else. So you might be able to contribute to decentralization while being comfortable with whatever validator that you primarily use. So there may be some interesting possibilities in the in the future in terms of yield redirection.
Yep, yep, absolutely.
Amit, besides that, you want to touch on anything else before going to cross-chain things?
Yeah, absolutely. So a couple of interesting plans, and in fact, pilots that we are doing with some of the staking infrastructure solutions that we have built, I want to touch a little bit upon those where we are taking our contracts and then using those contracts on institutional players, like custodians. In fact, one of the custodians pilot is at a very advanced stage. Similarly, we are taking the smart contracts to some of the funds that run their own validators offering these autocompounding and airdrops claiming to those funds. So some of these products should actually come to life in just the next one or two weeks. So we will have funds with hundreds of millions of dollars of LUNA staking with those contracts.
By funds are… What type of institutions are we talking about?
Some of the venture capital funds who are deep in the LUNA ecosystem and other ecosystems, they are very keen to explore some of these solutions, because it adds significant value for them. As you know, that claiming of rewards, restaking of rewards, all of that will actually mean that they have to access their cold storage wallets, and has several tax implications for them. So they are extremely keen to adopt our solutions.
Okay, great. Yeah, I don’t suppose you have any alpha as far as any particular groups that are public or anything like that?
It’s not yet public. So that’s why I’m not able to share the names, but I think in a few weeks, we should have concrete names.
Oh, interesting. So on a slightly different note, before we move on… I forgot to ask this question before. So the SD token, which we don’t really talk maybe that much about. With all of these things going on, maybe you could review briefly the value mechanism for the holder of that token. And also maybe describe a little bit about the recent listing and the listing price that was established, and how all that’s going exactly.
Short, absolutely. So let me quickly mention that we have recently closed a strategic private sale from a bunch of marquee investors or funds across crypto and traditional financial world. Some of the investors who joined the strategic sale are Three Arrows Capital, which is one of the large investors in the crypto space across several ecosystems. Along with huge US based asset management funds like GoldenTree Capital, and one of the Web 2 top class names like Accel, so all of these funds have joined the strategic sale that values, say, at about $450 million fully diluted value. And we are actually doing the public sale on CoinList at about very close to the $450 million value, which is the option one, and option two values at about $675 million. The reason why there is difference in the options is because the vesting periods are different. And compared to $450 million strategic round that we’ve closed, which values our token at about $3, the vesting terms are about three years, which is linearly vested for about 36 months. So obviously we’ll have to put a slight premium on option one, which is where the vesting is just one year and option two where the vesting is just six months. So that is the reason for the slight difference in the token price across the strategic round and CoinList price.
Coming to how Stader token, or Stader platform captures revenues or value is, one, obviously we charge a small amount of commission on stake pools, as well as on all the institutional staking infrastructure products that we are building and then taking to the market. All of that flows into our Treasury and SD token stakers actually get a chance to govern and vote on how to distribute this Treasury and how to manage the Treasury. So the entire proceeds of commissions and fee, go to Stader’s Treasury, in a short summary.
And everybody that did the community farming or who’s doing the liquid pool farming now with LUNA-LunaX. Everybody getting that basically has been getting SD token at what price compared to what these new investors are buying the token at now?
Gotcha. So the initial set of community farmers started farming SD tokens at about $0.43, which is roughly about one sixth.
So in other words, I a pretty good job by putting a lot of LUNA in there probably. Okay, good. And then what about the… So people use the LUNA-LunaX pool now. What is the current price of the token based… So basically what’s happening is, is you’re getting what the LunaX staking rewards are going to buying the token? Is that how that’s working?
So the LUNA-LunaX pool has a different mechanism. Users are not using their LUNA staking rewards. We are actually giving free SD tokens for people who are providing LUNA-LunaX LP in the liquidity pools. So about 25,000 SD tokens are being farmed by the LP providers every day.
Okay, great. Yeah, that’s interesting.
While they are accumulating the LUNA staking rewards into LunaX, along with their airdrops.
Got it, because basically people are giving up the LUNA half of the LP as far as rewards, they’re still going to get the LunaX rewards, and they’re getting a small amount of LP fees. I think they run around 2%-3% right now. And then on top of that, they’re getting the incentivized SD rewards basically, right?
Okay, great. Great. Yeah, I just wanted to clarify all those points.
Over the long term, I think the LP fees or the swap fees that the LP generates should be higher, because today most of the users have kind of provided LP and not moving them, because they are farming SD tokens. So over a period of time, I do believe the swap fees component should become much higher.
Yeah, I think also once we have more… Yeah, strategies in general on Terra, not just on Stater, but that include the LunaX liquid staking token, there’ll be a lot more DEX activity in regards to moving back and forth from LUNA and LunaX. And perhaps, some of those things that we’ve talked about in other Spaces, different types of bots, different types of trading strategies that can emerge that are predefined for people, and that will lead to a lot more trading activity based on say LUNA’s price, relative to… Well, one, relative to LUNA, but just relative to UST as well. So there should be a lot of interesting opportunities for people, I think. So you want to move on then to some of the cross-chain ideas and maybe some kind of roadmap theories of what you guys are doing next?
Absolutely. So in terms of just giving a brief on the overall multi-chain plans that we have, we’ve obviously received grants from two of the major blockchains already. One is going to be public next week, and the other is just closing the contract. The likes of Fantom, Hedera, etcetera. Some of these blockchains are very important for the Terra ecosystem as well. So what we are actually build… We’ve already started building some of these solutions. Obviously, Solana was always in the works, and we are ready to launch Solana in three to four weeks. The team is doing extensive testing and UI development. As soon as that is done, the SolX, and then obviously whenever Fantom, and Hedera, and Avax are done, each of these Xs derivatives are going to be launched along with the stake pools at different points of time. And some of these X tokens can actually flow into Anchor indigenously, based on the new plans that Anchor is having. So that the borrowing interest of UST is going up. When I say interest, I don’t mean the interest rate. What I mean is adoption of UST is going to skyrocket with a lot of these staking derivatives coming into LUNA ecosystem with Anchor borrowing.
But the way you envision this… So let’s talk about Solana for example. So are you going to have an interface separate that connects to a Solana wallet, and then that’s how you access SolX? Or is the ability to buy or use UST to get SolX, is that going to be a possibility right on Terra without having to jump to another wallet? What’s that going to look like? How’s it gonna feel like when we’re using it?
Gotcha. So the interface is going to be Stader, Stader dApp, either on web or, as soon as the mobile version is out, on the mobile Stader dApp. But the UI is going to have an option to actually select the indigenous wallets, for example on Solana it could be Solflare or Phantom wallet. While on Fantom blockchain, it could be a Metamask or something else. But the interface is going to be Stader, just that the wallet will be different. And Stader platform is going to support all the indigenous wallets.
What I was trying to ask is, so is a Terra user going to be able to use, say for example, buy directly SolX for example, without using an outside wallet. In other words, is it truly a cross-chain derivative, or…
Gotcha. Gotcha. Yes, definitely. I think it’s an interesting point that you brought up, Cephii. We have been actively trying to bridge LunaX to Solana and Fantom and then creating liquidity pools for wrapped LunaX on Solana as well. So it’s exactly the reverse, right. For example, SolX or FtmX is going to be bridged to Terra, and then we will create LP pools for each of these POS tokens on Terra. And users can actually buy those FtmX or SolX within Terra as a CW20 token, instead of using another wallet on another chain. I think it’s it’s pretty interesting. And it is going to come soon.
Yeah, the excitement there is that if you have somewhere between three to five really popular cross-chain wrapped autocompounders, then what am I’m excited to see is things like for example, autorebalancing strategies that involve things like FtmX, SolX, LunaX, so that basically, you could have a system that trades the price action and the price volatility delta between these various assets, but then you’re also simultaneously earning the autocompounding yield while you’re sort of trading them. So it really creates a much, much more efficient way to make money, so to speak, in crypto. And it’s dramatically more efficient than, say, just hopping on to KuCoin and buying some things or using a rebalance or there. So my suspicion is is that the APY’s from those kinds of techniques will probably run somewhere in the 200% plus consistent. And when you have that type of yield output, well, number one, it’s just a beautiful thing to be able to achieve that. But the other amazing thing is you can create what I envision as the normie investor protocols where a person can just, say, inject some UST into one of these things and have a fairly high likelihood of being successful over time. As opposed to what people do now, which is a lot of people buy too high and get rekt. And then they sell low and do all sorts of weird things. You want to have really, really easy to use systems where people can take advantage in my view of all of these wrapped autocompounding tokens, and then have rebalancers, that by themselves are essentially natively autocompounding is how those work.
So you’re basically talking about autocompounders wrapped inside of rebalancer autocompounders and the yield is just breathtaking. It should be pretty awesome for people. So yeah, that’s part of the reason why from the very beginning I was paying very close attention to Stader. I know that there’s benefits to the different staking pools and all the other reasons that you guys have for doing what you do, but for me, mathematically, this utility seemed one of the most compelling utilities for the average user that… I think you can build things that are relatively easy for people to understand. And relatively low risk over longer periods of time, because the autocompounding yields essentially really mitigate price volatility risks substantially. Anyway, so it should be fun kind of creating these things as you guys move forward.
Absolutely, I mean, I think two of the very interesting products that we have discussed multiple times in the past are, obviously, these autorebalancers that are composed of several derivatives of proof-of-stake staked assets, along with UST. That’s one of the fantastic products that can be built on top, along with potentially some of the advanced financial products like having ETFs on top of these several proof-of-stake assets, along with potentially UST. So these are a couple of my favorite products that can be built on top of these.
Yeah, I mean, in fact, Amit, I was thinking about this a little bit deeper. And one of the possibilities is, let’s say, for example, someone already has a lot of LUNA and is not interested in messing with it, right. They’re not interested in diversifying that. They just want to take the yield output and do something with it. So an example product strategy would be, you take what I just mentioned, some sort of like combo rebalancer bot with multiple autocompounded liquid staked assets, but what you do is you take the yield out of my LUNA now and deploy it into that rebalancer system on a dollar cost averaging basis, so that it functions like a vault. In other words, I don’t have to sell my LUNA now to buy FtmX, to go buy SolX. I could just basically have the current yield output from my LUNA go into that system instead, which, again, doesn’t create like a separate sales situation from a tax perspective, right. So these kind of like techniques could be very interesting from a tax efficiency standpoint as well.
Absolutely, having some of these… I do know that some of the retail investors actually are very conservative about tax. But I do envision some of these products being extremely valuable to institutions, who are very, very conservative when it comes to taxation.
Yeah, for sure. And you know, the tax issue’s interesting because as everyone knows, if you hop on to some platform and try to use a bot or you try to use… You claim rewards and you stake them, every single little thing becomes some ridiculous taxable event. Because the regulators and such have not created a simple strategy in any country probably for taxable events. So the beauty of having things sort of almost traded for you like an ETF format inside of a vault is that not only do you get all of these staking reward autocompounding benefits, but on top of that you’re getting it without having to pay a tax every single transaction which would normally happen if you’re concerned about these things. So the tax efficiency makes the actual income yield off those rebalancers just skyrocket if you think about it, because you don’t have a taxable event every time when it’s being done in the background. Basically at the time when you claim all of the income from all of that does it become taxable, and even then you could have cool stuff like, you make the claim on UST so in other words, if all these neat little products are happening, you could actually have a slider where it says, I want to claim this and UST versus claim it in the other tokens that are available. So you could use these techniques to create an income source for oneself. And that’s really important, I think, for a lot of people who just want to spend their UST.
So you have all these cool things, that’s pumping out money for you. And then you have the UST headed off to your, I don’t know, Alice card or something like that, and you go and buy something, but the yield. So you know, me personally, I’m much more interested in these strategies than the Anchor Earn 20% yield concept, personally. I think that Anchor Earn UST yield is more of a… It’s like an interesting tool. But I would rather have really high yielding products that are superior to 20%, while simultaneously getting the price action of rapidly growing assets, as well. So that’s kind of my thinking. But it does, it is relevant to most people that they prefer to have a system where they didn’t have to sell their LUNA, but they still have amazing outcomes from their yield output, such that maybe that’s optimized over time, and creates like an income source for people is kind of my thinking. I don’t know, Amit, if you’re listening on some of my other conversations about, in the future, the possibility of replacing, for example, things like health insurance on Terra. Some of these protocols or systems, using the yield of Web 3.0 assets is I think, the way to revamp the entire global… For example of health insurance systems, and where the folks in the system are actually getting a tremendous amount of value, but can have that go to other traditional finance systems that you wouldn’t think of like health insurance.
So once because once you have a yield output, you essentially have revenue, and instead of that revenue going to other agencies, you wind up having the yield output go to fund the pools to pay for things like, I don’t know, health insurance needs, for example. So it should be pretty interesting. And Amit, you’ve got a lot of noise in the background, by the way, you might have to mute your mic.
So anyway. But yeah, those are some of my thoughts, I think Stader’s systems are… In my mind, the use of staking yield is an extremely important part of building out a lot of different dApps that use that revenue to do all sorts of things, diversify into other financial products, diversify into bot systems diversify into specific other coins, and then also diversify into, say, for example, IDO tokens. Tthey might be able to do a IDEO pool, for example on Pylon, you know how there’s like a dozen different coins emerging there that you could buy into. But maybe you don’t really want to figure out which one of those you want, maybe you just want the yield output for your LUNA for a year to go to buying every random coin that you possibly can get on there, or whatever. So there’s ways to create a mutual fund type of buying strategy for a lot of different things. So all sorts of strategies can be produced in terms of how to buy things. But more immediately, I’m kind of interested in the use of my yield output to arbitrage, the yLUNA pLUNA Prism thing, which would be very interesting, because then you could use your staking rewards to redirect into playing games with those price differentials. And all that volatility and price movement actually ends up leading to a lot of free money, actually, if you know what you’re doing. So, anyway, any other thoughts, Amit?
No, I think some of these ideas are really interesting. And I couldn’t wait. I mean, I’m eager to sort of build some of these strategies as Prism and White Whale and some of these other protocols on the Terra ecosystem go live. Currently, obviously, we’re a bit constrained in terms of the number of protocols that are live on the Terra but as as the ecosystem grows there as there are more and more protocols that go live. Some of these strategies would be extremely interesting.
Yeah, I think some of the things people might maybe complain about with Terra is that, well, there’s not that many protocols on Terra. There aren’t that many “interesting things”. And I think the reason for that is because there are only so many applications to blockchain right now that make any sense, that are sustainable and make any sense. There’s trading, which is DEXes and whatnot. And every chain has their DEX and trading crypto, and making number go up, and people making money is one of the primary reasons why people play in crypto, as opposed to being in it for the tech, so to speak. And then you have… So there’s a relatively short list of applications that involve yield and involve lending. And these kinds of things tend to emerge on every protocol. What makes Terra, I think, maybe unique is that some of the base protocols like Anchor, like Mirror, like I think what’s Stader is going to be considered one of the keystones, things like Prism, is you create really, really unique situations in terms of differentiating Terra from lots of other things, which then provide the framework for, for example, video game builders, people who want to make real world applications out of these things. And they’re going to look for sustainability. So if I’m a billion dollar company, and I’m looking to come and create something on Terra, I want to know that, for example, the Anchor yield is going to survive, like all of you are wondering about. I’m going to want to know what is TFL doing with its money, and how is that going to play out like the LFG announcement that just kind of came out recently.
All of these are important questions, and you want to have a mixture of sustainability of the yield, sustainability of Anchor, sustainability of LUNA’s staking yield, and where is that money gonna come from, and all of those are the key questions. And I think there’s a lot of fun stuff that’s going to happen with what Stader is offering. So it definitely sparks my imagination as far as things that can be built. So hopefully, everyone’s had a sense of why we’re talking about this, and why I enjoy speaking with the Stader folks, and everything. By the way, I don’t have any direct connection with Stader or anything. So any posts, comments I make, or opinions are mostly my own. And they’re not obligated to either make anything I say, or nor is anything I say some sort of promise from them. So just, yeah, be aware of that. But let’s maybe take some questions here. If anyone wants to hop up, just hit the Speaker Request button, and we can bullshit for a little bit with everybody. [chuckle]
Yep, absolutely. I think we have about 10 minutes to take any questions. Cephii, you are also running late, right?
Yeah, I’m a little time constrained today. So I kind of was gonna do an hour this time for this conversation, which I think we covered a lot of the big topics, right? Did I miss anything?
No, I think we have covered most of the topics that were there on the agenda for today.
Okay, here, let me get D on here. What’s up, man?
Good morning. How you doing?
How you doing? Good, Amitej.
I’m doing great. Thanks for joining in, D.
Thank you. Appreciate it, appreciate it. So I have a quick question. I see that Lucky’s in the audience now, he was in a Space yesterday where I’m gonna ask the same question now. Basically, I’m trying to get into staking on crypto. Again, I’m new to this as far as the staking as aspect. And I want to know, how can I start as far as what’s the best platform? What are the good resources for me to research, for me to start staking? And what are the benefits aside from earning yield from staking?
D, you happen to… Do you already have your LUNA on your own wallet address like on Terra Station or have you not done that yet?
No. I have not done that yet. No. I’ve been looking through the…
So the first thing… Yeah, sure. Well, let me kind of like walk you through a couple of points, a couple of basics for you to do as homework, I should say. And then you can really jump from there. Once you get your LUNA…
One second, let me just get some paper.
Oh, you’re gonna take some notes. [chuckle] I like it. Well actually, TerraSpaces actually record so you can always jump on to TerraSpaces and grab the recording of this later if you need to find it.
Okay, perfect. So I got the pen and paper now. Thank you, Cephii.
Okay, wonderful. So what you’re gonna do basically is number one, you need to get your LUNA to a wallet and assuming you bought LUNA as native Terra LUNA then you can basically send it to your Terra Station wallet address. And normally you have staking options right on your wallet there if you want to use them, but what Stader does, and their site is staderlabs.com right, Amit?
staderlabs.com, and is that S-T-A-T-E-R?
D-E-R, D as in dog.
Okay, got it, Stader.
Yeah, so staderlabs.com. And basically the difference is, is that when you initiate the staking process through their site, you basically have your Terra Station wallet, you’re going to connect it to their site, and then you’re going to have the option of staking with them. And there are a variety of advantages doing it that way. You’re actually not staking with Stader, what you’re doing Stader has built a layer on top of staking solutions. And it basically helps you optimize your yield output into autocompounding more LUNA basically. So it’s pretty cool. I wouldn’t get too deep into it into the conversation right now it sounds like if you’re just getting started, you want to first just get yourself a wallet, get your LUNA there. And then check out their site, and it’ll really clarify for you what it does. But basically, it optimizes your income potential by basically taking, in the case of Terra LUNA, you get basically UST as part of your rewards. UST is the US dollar pegged stablecoin. And that can be redirected to essentially rebuying more LUNA, which then of course, gets you more staking rewards in an autocompounding sort of feedback loop. So that’s pretty cool. So it’s definitely… If your primary goal is to park your LUNA there and stake it and leave it there for a long time. I think that’s the primary benefit you get from using something like Stader Labs, especially if you’re kind of an amateur and starting out staking. So I definitely recommend learning a lot about it. I think Web 3.0 is the future and I personally find it to be pretty lucrative, but anyway.
Let me ask you something. You said get the wallet, so I have Coinbase, I just haven’t bought LUNA would you say that wallet and then connect that particular wallet address to starterlabs.com? staterlabs.com, I’m sorry.
Yeah, and when you buy on Coinbase it’s a little bit more complicated because they have Ethereum wrapped LUNA. You can’t actually send it directly to your Terra Station Wallet. So Terra Station is an app you can get, just download it on the App Store, T-E-R-R-A Station, and you can basically start from there. There’s quite a few YouTube videos on how to get your wrapped LUNA from Coinbase to there, but it basically involves using what’s called a bridge and I know it’s a lot of terminology if you’re kind of new to this, it’s kind of weird, but eventually… Go ahead.
I was gonna say, I’ll just go with what you said there was get a wallet. I’ll look into that
Yeah, get it wallet and then there’s some videos out there that talk about how to get your LUNA from, for example Coinbase over to that. It’s a little bit more complicated because the type of LUNA that’s on Coinbase is an Ethereum based wrapped LUNA, they call it. And yeah, these cross-chain names are really weird for people to understand, but it does take a bit of time to figure it out, but it’ worth it.
And what kind of LUNA is on Terra Station wallet?
Terra Station is considered native Terra, like the actual Terra LUNA, versus what you’re seeing on Coinbase is Ethereum wrapped LUNA, which is slightly different.
Got it, got it
Okay, my friend. Very good yeah, good luck with all that, I’m sure you’ll figure it out.
Alright, what do you want to get up next here?
Stader Pro 54:48
Stader Pro 54:50
Stader Pro 54:53
Hello. Am I audible?
Stader Pro 54:59
Yeah. So, Amit, actually I have a query regarding the Stader Labs, why you have choosen the Terra LUNA blockchain only. I mean, there are a number of other blockchains like Near, Polygon and Solana which are too famous these days. So there is any specific reason for choosing the LUNA for the Stader Labs.
I think in hindsight, it was very obvious. But let me give you a slightly longer answer. Terra is an ecosystem, and obviously, the vision for Terra is to bring a lot of real life users to crypto. Basically, they’re building products across three major domains, right. One is savings with Anchor, two, investments with Mirror, and three, payments with Chai. And Stader, our vision is to actually bring a billion users to staking. And that vision kind of resonated very well with us. On top of that, the proof-of-stake and staking ecosystem on Terra is extremely advanced. I haven’t seen another ecosystem where the validators are highly mature, and so many validators are trying to actively contribute something or the other to the ecosystem. Like we have OC here, who runs his own Telegram group, creates content, and SmartStake who creates his own dashboards, and several validators that are differentiating themselves by airdropping to their stakers. And it’s just the beginning, right. I can see a huge… I think recently, Coinhall also started a stake-to-subscribe program. I think it’s only a matter of time that some of these validators try and build extremely sophisticated solutions, like adding real life health insurance products for stakers that stake with them for a long period of time, or create social tokens for stakers who are going to stake with them in the longer run. And then those social tokens can give you access to exclusive incentives, etcetera. So all of these factors led us to choose Terra ecosystem to start with. I hope that answers your question
Stader Pro 57:14
Yeah, pretty cool. And one thing more I have to ask, how does Stader unlock the possibilities for the gaming integrations, like you have mentioned in the roadmap also.
Sorry, possibility for what integration?
Stader Pro 57:28
Gaming integration. Got it.
Stader Pro 57:30
Gaming integrations and the DeFi. Yeah.
That’s quite fascinating, actually. If you take what we are doing, we are actually claiming all the rewards into a separate smart contract. And those rewards are actually redirected to either autocompounding or they can be converted to stablecoins and retained in the wallet or those rewards can actually be used to play games, say, for example, in the future. I’ll actually take Lotterra as an example. So within a few months, you can actually start to redirect your staking rewards to Lotterra and play no-loss lotteries. Or in the future once prediction markets have all go on Terra, you can choose to redirect your rewards to, let’s say, two or three prediction individuals who are doing extremely well on the prediction markets. So all of these are possibilities on top of your staking rewards.
Stader Pro 58:30
Okay, got it. And last but not least, how you will be selecting the validators from the public, I mean to say that, in terms of the decentralizing the network? Are you getting my point?
How is Stader choosing validators?
Stader Pro 58:45
The validators from the public. Is there any criteria to be mentioned by the Stader Labs? Then how do we come up with?
Of course, we did actually share all the criteria transparently with the community on our blog post, we have performance parameters, slashing history, as well as pool-specific criteria for selecting validators. Relative
Hey guys, can someone else jump in?
Yeah, please go ahead, 26gtd.
Yeah, quick question. Thank you for taking the time, Amit and Cephii, for putting this on. Now, do you know if US residents are not able to participate in Coinlist? And second question, it looks in the FAQ that the community farming ends today, is that right? And is there still time for someone to go in and participate in farming to try to earn some SD tokens or is that done? When is the snapshot, basically.
Gotcha. So the community farming is still ongoing for LUNA-LunaX providers. So you can basically stake half of your LUNA with Stader on the liquid staking pool and combine it with the rest of your LUNA and provide LP on TerraSwap. That can give you… So using that you are eligible to farm Stader tokens. And then based on random snapshots, your Stader tokens will be credited to your account every week on Thursday, end of day. So on the plain stake pools is where 2% allotted tokens were completely formed already. Having said that, we are planning to actually have more rewards for stakers who continue to stake, so we will have more and more SD tokens as rewards for sure. SD farming is still available for LUNA-LunaX LP providers.
Is that only on TerraSwap or…
Yes, it’s only on TerraSwap as of now.
Okay, thank you. And then the Coinlist, not available for US residents, right?
Yeah, unfortunately, it’s a rule that Coinlist has.
Okay. Okay. Thank you guys.
Thank you very much. Please go ahead. Nathan, right? Yes.
Nathan Masters 1:01:12
Hiya, I just want to ask you when I stake with Stader X, obviously, I can swap straight back on Terra Station and not have to wait the 21 days. Is there a chance that the LUNA could lose its value if I swap straight back? As in how does it kind of keep its peg, the LUNA pegs?
Okay, so just rephrasing your question. How does the LUNA-LunaX peg is maintained? How is it maintained, right?
Nathan Masters 1:01:41
Yeah, that’s correct. Yeah.
Okay. So there are two things to consider here. One is LunaX Price on Stader dApp is constantly increasing every day, as we claim and restake your rewards and they are autocompound, right. So the LunaX price on Stader dApp is increasing every day, but the LUNA price on TerraSwap is determined by market factors. So it could be higher than the price that is there on TerraSwap, or it could be lower, depending on supply and demand for LunaX. The moment the price goes beyond the particular take value, then arbitrage kicks in. Cephii is the master here, so…
Nathan Masters 1:02:23
Yeah I’ve looked into the bLUNA stuff. I’ve looked into that. So it’s similar is what you’re saying?
Nathan Masters 1:02:30
Okay, that’s great. Appreciate that.
Yeah, the way I would look at it is, number one, you want to be sure that on the AMM, you’re sort of getting a good deal for your swap, if you’re going to convert between LUNA and LunaX. And one of the ways you sort of figure that out is by going to Stader’s site and looking at the true price of LunaX as it relates to the autocompounded price. So since there’s a variability on the AMM, Amit, it’s possible that in the future, what maybe you should do is that the swapping mechanism on Stader’s site itself actually clarifies whether you’re getting a negative or positive net benefit when you do the actual swap. For example, if you go on Astroport right now and you’re swapping LUNA to bLUNA, there’s a small percentage number at the bottom of the swap page. And it tells you are you net in the green or net in the red as far as the peg value, the ratio of the value that you’re getting when you’re swapping, and is it at peg, or above, or below it. That’s, I think, important for people, ultimately.
Nathan Masters 1:04:01
Unfortunately, TerraSwap doesn’t do this for you.
Nathan Masters 1:04:06
No, yeah, just quickly, because obviously, with the SD tokens coming into an end. Is there a chance that the LunaX price could drop slightly, or you’re just assuming that most people will carry on staking, because I’m actually staking at the moment with yourself. I’m looking to obviously move that. I’m kind of thinking do I need to wait and keep an eye on the price or is it worth just moving in?
Gotcha. Awesome. So the first thing is obviously, we are going to add more and more rewards to the LUNA-LunaX. And the other thing is there is a vesting period for the SD tokens after the farming ends, if there is a smooth heavier reduction if at all there is any. So it’s not randomly reduced drastically. And then beyond that as we add more and more strategies on top of LunaX, like the Mirror integration, and the Edge Protocol integrations, as well as some of the cross-chain integrations, the demand for LunaX is going to significantly increase, and the swap fees are going to increase. On top of that, added our SD tokens. So we do expect the liquidity pool size is going to significantly go up for sure in the future.
Nathan Masters 1:05:29
Okay, that’s great. I could definitely do some more research on it myself, I was just quickly jumping on to ask you a question, but I appreciate your answer. That’s great. Thanks for your help.
Hey, guys, I’ve actually got to drop off, Amit, I’ve kind of got a hard time stop today, unfortunately. But there’s a few more questions. I guess, maybe you could wrap things up with folks.
Yeah, I’ll probably take one last question. Marty has been trying to ask a question. And then we can wind it up.
Okay, yes, we’ll catch you later. Okay.
marty schoffstall 1:06:02
Thanks. Thanks, all.
Yeah. See you later. Marty.
marty schoffstall 1:06:07
Hi, marty, how are you today?
marty schoffstall 1:06:11
Very good. I’m totally aligned with Cephii’s observations about the use of other high return high income, essentially, assets. So, your current strategy is kind of multi-chaining, which means that you have to basically, integrate into the Solana chain, into the Fantom chain, etcetera. Okay. And I get that, very standard way, makes a lot of sense. However, number one, at least from my favorite asset sitting on the Cosmos space, it doesn’t get me the high return assets that are there. Okay. So from a procedural perspective, or a prioritization perspective, it doesn’t get me that. So, that’s a detail. Have you considered an alternate way of essentially redirecting the returns that I get from staking with Stader to go into those IBC native assets in a pool hosted by Loop, for example. So, what I would like is to get my return, and maybe a blend of aUST, maybe LunaX, but I’d also like to get OSMO, okay. Or maybe I want to get JUNO or maybe I want to get CMDX, okay. So that does not require, at this moment, at this very moment, it does not require any integration with the protocols. All it requires is a pool to be available somewhere on the Terra system. So that’s kind of my thoughts.
Yeah, absolutely. I think that is where some of these cross-chain DEXes… Of course, so far, the biggest cross-chain DEX was THORChain, which had exposure to all types of IBC assets. I think some of the observations and the kind of products you have in mind are really interesting. We would definitely love to actually explore some of these strategies on Stader platform even in the short to mid term as well, because I do understand that LUNA stakers would want to take their high yields, and kind of deploy them in even further high yield generating assets across the Cosmos ecosystem.
marty schoffstall 1:09:09
Right. It’s definitely this combination of kind of high yield… And I wouldn’t call it stable, but growing assets, right. So as an example, I think the second largest pool, and Osmosis, which parenthetically is, the third largest DEX out there, is in fact the LUNA-OSMO pool, right. It’s pretty large, and it’s only going to get bigger. So there’s interest already. It’s already been signaled that there’s an interest in the OSMO token, for lack of a term. So just bringing that into Loop and having that as an outcome of your redirection, which kudos for you for having basically user or consumer ability… Ability to have redirection coming out. I think that pool alone is going to be interesting to some set of people. Certainly do OsmoX as a next step. But those kinds of pools can be put up in days instead of weeks or months of development time.
Yep, I think it’s a fabulous strategy. I am talking to Tom anyway, tomorrow, from Loop. Let me bring it up and figure out how we can make this as a reality.
marty schoffstall 1:10:36
Very good. Thank you very much for your hard work in this call.
Absolutely. Thanks, marty. Thanks for joining and asking questions. I mean, I learned a lot from these AMAs. In fact, some of the ideas that we have got are really from these AMAs, so many thanks to all of you who are joining and contributing to the project. Awesome. On that note, guys, we had this AMA planned only for an hour. Thanks a lot for joining, look forward to doing further AMAs with you, and getting a lot more ideas and blessings from all of you so that we could continue to build this platform further. Thanks a ton for joining. Okay, bye-bye. Bye, everyone.
Thanks for checking out another episode of The Ether. That was Stader Staking Weekly, hosted by Cephii and Stader Labs. Recorded on Thursday, January 20th 2022. This episode of The Ether is 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 check out dystopAI minting today, which is the 20th. Don’t miss it. For more information check out luart.io. TerraSpaces appreciates their support. For terraspaces.org, I’m Finn. Thanks for listening.