The Oasis community need to potentially tap into insane yields on Terra (think 150-200% APR) without needing massive upfront capital. How? By being smart, collaborative, and leveraging what already exists across DeFi. It sounds wild, but the pieces are on the board. We need to think that how we could explore this opportunity, together:
The Core Idea: Smart Borrowing, Strategic Deployment
- Borrow Smart (Under 10%): Forget putting all our own cash in first. Let’s borrow stablecoins (like USDC) cheaply from the big, established DeFi players.
- Where? Places like Aave or Compound on Ethereum or Polygon, or Benqi on Avalanche. Why? Because their rates for stablecoin loans often dip below 10%, especially when things are calm. We’d need to put up collateral (like ROSE, ETH, or other assets we believe in) – say, $150 worth for every $100 we borrow. It’s a safety net for them, and leverage for us.
- Oasis Advantage: Our super-low fees ($0.01 transactions!) mean borrowing and managing this debt is WAY cheaper than on Ethereum. Every dollar saved on gas is a dollar earning yield.
- Bridge Smoothly: Get that borrowed USDC over to Terra 2.0 quickly and securely.
- How? Use battle-tested bridges like Wormhole or Axelar. They’ve handled billions. It takes minutes and costs peanuts compared to potential gains. Convert it to something Terra loves, like axlUSDC (Axelar’s version) or USDC.
- Deploy for Turbo Yields (Targeting 200% APR): Park that capital in Terra’s Liquidity Alliance, specifically protocols like Eris Protocol.
- Why Eris / Terra Alliance? Terra 2.0 needs liquidity. Badly. After the crash, they’re pulling out all the stops to attract it. The Liquidity Alliance (Eris is a key player) is offering massive incentives to liquidity providers by incentivizing with chain inflation – we’re talking potential APRs in the 200%+ range for providing liquidity in crucial pools like LUNA-USDC or stablecoin pairs.
- The Yield Breakdown: It comes from:
- Trading Fees: A solid base (maybe 20-50% APR) from people swapping in the pool.
- Incentive Overdrive: The big kicker (150%+ APR) comes from rewards paid in LUNA through chain inflation, ERIS tokens, and stablecoins – funded by Terra’s rebuilding efforts and Eris’s own mechanisms. They want our liquidity there.
Why This Makes Sense
- The Math Speaks Volumes: Picture this: We borrow $100k USDC at 8% APR (cost: $8k/year). We deploy it into an Eris pool averaging 200% APR (earning: $200k/year). Even after paying the borrowing cost, that’s $192k profit annually (192% net APR). Even if the Terra yield drops to a more conservative 150%, we’re still netting $142k (142% APR). After tiny bridging fees? Still life-changing returns. Our low Oasis fees make this math work even better.
- Oasis is Our Secret Weapon:
- Cost Killer: Paying pennies for transactions instead of dollars means our borrowing/repaying/managing strategy is hyper-efficient. Every bit of yield stays ours.
- Privacy Edge (Optional but Powerful): For larger players in our community, Oasis’s confidential DeFi could allow strategic borrowing moves without broadcasting everything on-chain. Privacy can be a competitive advantage.
- Home Base Stability: Oasis is fast, secure, and cheap. It’s the perfect operational base for managing this cross-chain play.
- Terra’s Incentives Are REAL (For Now): Let’s be clear, Terra isn’t offering these crazy yields for fun. They have to. Their ecosystem survival depends on rebuilding liquidity. The Liquidity Alliance (Eris Protocol included) is backed by significant chain inflation and tokenomics designed to sustain these incentives for the near-to-mid term (think 1-2 years). It’s a window of opportunity driven by their need.
- Risks? Manageable Together: This isn’t risk-free, nothing in DeFi is. But we can be smart:
- Borrowing: Overcollateralize (150%+). Always use stable collateral if possible. Monitor prices – Oasis’s speed will help us react fast.
- Yield Fluctuation: Diversify across a few pools. Consider stablecoin-heavy pools (like USDC/USDT) to minimize Impermanent Loss (IL). Set community alerts for if yields drop significantly (say, below 15% over borrowing costs).
- Bridges: Use the big, audited players (Wormhole, Axelar). They’ve proven robust.
- Start Small, Scale Smart: We don’t to Go big with the community treasury. We start with a pilot pool, prove the model, learn, and then scale responsibly as confidence grows.
- Market Timing: Right now, borrowing rates in established DeFi are relatively low (often 4-9% for stables). Terra’s TVL is a fraction of its peak, meaning the high-yield incentives are crucial for them and available to us. This arbitrage window won’t stay open forever.
How We Execute This as a Passionate Community:
- Knowledge is Power: Let’s host community calls and workshops. Deep dives on: “How to borrow safely on Aave/Polygon,” “Bridging 101 with Wormhole,” “Understanding Eris Protocol Pools & Rewards.” Share guides, checklists, risk frameworks.
- Build Our Tools: Create a simple, community dashboard. Track real-time APRs on target Terra pools vs. current borrowing costs on Oasis/Ethereum/Polygon/Avalanche. Set up alerts. Transparency is key.
- Forge Alliances: Reach out as the Oasis Community to the Terra Liquidity Alliance and Eris Protocol. Explore if we can create dedicated Oasis-ROSE related pools on Terra with even more attractive incentives for our capital. Partnerships amplify our impact.
- Collaborative Treasury Pilot: Could a portion of the community treasury (managed transparently via DAO vote) be used as initial collateral to demonstrate the strategy and share profits back to the community? Or form smaller, trusted “pods” to test.
- Share the Wins (and Learnings): Foster a culture where community members share their successful (and unsuccessful) deployments. What pools worked? What borrowing sources were cheapest? Collective intelligence makes us stronger and safer.
Addressing the Doubters :
- “200% can’t last!” You’re probably right, long-term it might not. But Terra is pouring serious resources into making it last long enough to rebuild. Even if it halves, borrowing at 8% to earn 100% is still a 92% net APR. That’s phenomenal. We ride the wave while it’s here.
- “Bridging is scary!” It used to be riskier. Bridges like Wormhole and Axelar are now industry standards, heavily audited, and insured. The risk is far lower than the potential reward, especially with small test amounts first.
- “Impermanent Loss will eat my profits!” This is valid. That’s why focusing on stablecoin pairs (USDC/USDT) is crucial – IL is minimal here. Even in LUNA-USDC, the massive incentives can often outweigh moderate IL. It requires monitoring, but it’s manageable.
The Bottom Line :
As we know this isn’t just chasing hype; it’s about strategically leveraging Oasis’s strengths (low fees, speed) and Terra’s current necessity (high yields) to potentially generate significant returns for our community. It requires collaboration, education, and careful risk management.
Let’s not just watch this opportunity pass by. Let’s explore it together, intelligently and passionately.
- Get Educated: We need to dive into resources on borrowing (Aave docs), bridging (Wormhole/Axelar), and the Terra Liquidity Alliance/Eris Protocol.
- Join the Conversation: We need to Bring your ideas, concerns, and questions to community forums and calls. What strategies make sense? What safeguards do we need?
- Consider a Small Test: If you’re comfortable, try the flow yourself with a small amount: Borrow on Polygon → Bridge via Wormhole → Deposit into an Eris stable pool. See how it feels, track the returns.
- Push for Tools & Partnerships: Advocate for the community dashboard and dialogue with Terra/Eris.
This is how we build: strategically, together, leveraging the interconnected DeFi ecosystem to empower the Oasis community. Let’s see what we can achieve together.