Those of you who follow my articles know that my management in DEFI is 80% of the time researching (including the time needed to make a VPM and test the strategy before putting real money in), and 20% of the time in the market operating. Due to this combination and consistency I have continuous improvement in my results.
In this article I am going to show a clear example of how good research, purpose and good planning can carry out a strategy with excellent results. I am going to detail in 9 simple steps my way of understanding the definitions when I execute financial products with low risk and good returns. Above all I want you to understand that this is not the result of a summer night where you come up with a great idea, but rather It is a process that is simmering in which there is no logic and many times you don’t even know if it is the right thing to do, but your own instinct and the heart of this technology drives you to do it without a doubt.
Step 1) July 2021, LUNA is purchased with an average price of $6, from here planning begins to increase the amount of LUNA in the portfolio without having to spend capital, without taking risks with third parties and without miraculous potions. By simply using the tools that this network and its protocols make available to us.
Step 2) Throughout the year 2021, certain price and parity patterns between LUNA and bLUNA were met, and that gave the perfect game plan to put into practice what was studied. With the clear objective of increasing my LUNA, without knowing anything about what later happened with its price and even less that certain protocols under construction would give me the opportunity to further maximize these returns. From July 2021 to March 2022 I continuously applied the arbitrage technique between these tokens. As the image shows in many moments the 1:1 ratio is far below, moments where it was very profitable to apply and be patient (about 21 days since you make the swap of bLUNA for LUNA, which is how long it takes to return your investment).
Step 3) In terra swap I swapped Luna for bluna, as you can see in the image, when it is below that 1:1 (specifically the image shows 0.983733 Luna for bLUNA) it is the ideal time to do the swap and start increasing your account, since I just got 1.6% more in a single click (in the previous image of the graph you can check the number of times that parity is below 1:1, so it was non-stop).
Step 4) With those bLUNAs I went to anchorprotocol.com to exchange them for LUNA, waited 21 days for that burning process to be applied to collect the same LUNAs that bLUNA exchanged without any loss or penalty. So I bought them at a discount price and exchanged them 1:1, this is the business.
Step 5) I repeated this process during 2021 and the first 3 months of 2022 applying compound interest. If I compound 2% more on each swap and I do them every 24 days for a year, I can do 15 bLUNA swaps for LUNA. If you now multiply those 15 swaps by the 2%, that’s what I get on average on each swap. That gives an annual APR of 35%, so I got more LUNA than I started with.
Step 6) Well with this rate achieved and the portfolio with much more LUNA I have to start producing profitability with higher APR. Triple annual profits, (without taking excessive risks) and let the price of the LUNA token continue to run (remember that I bought it at $6 and now it is at $86). If we take this into account my returns are exponential and nonlinear.
Step 7) Go to the lido.fi protocol, a protocol that allows me to stake my LUNA tokens among others at 7%. Why do it with this protocol and not others? Good question. I do it for security, backing of the high liquidity deposited in the protocol, past security audits and for being a financial product with clear lines, where everything follows a process without hot parts. Nobody can assure you that nothing will ever happen and your operation or strategy will turn out well, but as I always say “The sure thing stopped being profitable a long time ago”. The other reason is purely strategic, since by depositing LUNA in LIDO, it makes the stLUNA token available to me as a signal or guarantee of my deposit in a certain proportion.
Step 8) I collect the stLUNA that LIDO gives me and I take them in my wallet along with the LUNA that I have left free to work with, this time in the astroport.fi/en to provide liquidity in the stLUNA / LUNA pair and start generating 18.96% annual interest rates.
Step 9) Every week I collect profits and the ASTROs that the protocol pays me are deposited in the governance through a stake, which brings me a 54.93% annual APR.
Therefore, to summarize all and to close this article, the situation is as follows:
- Purchase of LUNA at $6, currently trading at $86, this operation brings X14 by itself.
- Arbitrage between LUNA and bLUNA brings me 35% annual APR, as my strategy was carried out for 8 months, my annual APR was 20%, therefore my LUNA portfolio increased 20% in assets without contributing more capital and with operating costs of $15 approx.
- Staking of my LUNA (not all since the strategy goes through several processes where LUNA is involved as a liquidity pair) in lido.fi which gives me a 7% annual interest rate.
- Provide liquidity with the stLUNA that LIDO gives me and with the LUNA that I have left in the wallet in the astroport.fi/en (stLUNA/LUNA) at 18.96% annual APR without IL risk.
- The generated rewards (fees that Astroport pays me for providing liquidity) in ASTRO tokens, I collect every 7 days and deposit them in staking, generating an annual interest rate of 54.93%.
- So a simple purchase made in July 2021, turned into a rocket of profitability and productivity simmered, planned in detail and with a clear purpose to exploit the generosity of this market when you do not fight against it.
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