Terra. Luna. Strategy.

Thesis

Okay, Terra: $LUNA and $UST. The crash happened, but that's not a rugpull, not by definition.

Now, @stablekwon says $UST is not the answer. When Terra moves off $LUNA and $UST to something else,

... that is a rugpull. By definition.

So, I froze there for a second. But: this is going to happen.

It doesn't matter what happens: it matters what I do.

This transition off $LUNA / $UST is going to take a month, more or less? to find a viable alternative.

That's my window of opportunity.

Let's get to work.

Antithesis

Okay.

Terra.

$LUNA.

The price-variability seems to have settled for now, with Price Impact below 1% again.

How are we going to do this, folks?

*everybody stares at me, waiting.

Wut.

Okay, $LUNA's back to high volatility: let's play a game.

I want you to pretend with me that the crash didn't happen.

Why?

Because I have 4M $LUNA. How would you manage 4M $LUNA pre-crash?

For me (and perhaps ONLY for me), the answer is: "the same way I'll manage $LUNA now."

Continuing this game, how will I manage 4M $LUNA now?

4 domains, I'm thinking:

1. $LUNA-> $cLUNA arb
2. $LUNA-> $bLUNA arb
3. $LUNA-> $LunaX arb
4. $LUNA, no arb

It's overly simplistic, but it captures the 4 domains of @prism_protocol, @anchor_protocol, @staderlabs, and misc.

Okay, but arbs are tricky things on Terra, particularly. Why? because they take the $LUNA-in-transition out of circulation for 21 days. You do an arb, you're COMMITTED, baby, and you get nothing for it for those 21 days. So, I say 'arbs,' but these arbs must be handled with care.

So, my 'handle with care'-approach is as follows:

• per domain, I allocate 25% of the $LUNA for arbs,
• per arb per domain, I allocate ~5% $LUNA/day for arbs

Thus we (re)born infinite $LUNA wells for each arb-type.

Let's do the math. ... (pause)

Arbitrage

Continuing this exploration. Here's a conundrum.

The $bLUNA -> $LUNA 21-day burn mechanism still assumes a $bLUNA - $LUNA peg, 1-to-1.

But trading $LUNA for $bLUNA has a very different narrative. That trade is ~ 20-to-1 in Terra now.

So the $bLUNA burn sucks.

This story is repeated for $cLUNA and $LunaX as well. The burn mechanism 'works' as before (1-to-1+ε), but the trades are terribly slanted away from $LUNA now. 

Avalanche Tour

This is interesting.

On the Avalanche blockchain, on @BenqiFinance, there are several BORROW positions that are paying NET-POSITIVE $QI yields.

They are: $LINK.e, $USDC, $USDt, $WBTC.e, $WETH.e

Infinite $AVAX well

I am burning 1 $sAVAX to feed my infinite $AVAX well, BUT! lookie, here! I have 1 $AVAX to claim from said infinite well! Let's claim it and do the math. #EXCITE 🔥

This is the $AVAX-claim page where we claim the $AVAX from our infinite $AVAX well.

Okay. Claimed. Now, let's go to trade it to $sAVAX, looking for arbitrage.

BUT WAIT! and BEHOLD!

Our infinite $AVAX well tells me we have another claim coming in 1 hour. Let's hold off claiming this first one and claim both, saving a wee bit on transaction fees.

See y'all Avalancheans in an hour or so. 

... (an hour or so later, after my calming walk).

Okay, NOW we collect the 2ish $AVAX from the infinite $AVAX well.

So, $sAVAX earns 7%, just sitting there, so our arb, or other vehicle must make more than that to be worth it.

SO! Let's explore these options, shall we? 

Options

Restake

Well, what is this low-bar? Restake. What does that look like?

1. STAKE 2 $AVAX -> 1.97 $sAVAX on @BenqiFinance to earn 7.2%

The problem is we started from 2 $sAVAX, so we're going in the wrong direction with simply a restake.

Supply for $QI Yields

Now, let's explore alternatives. You can supply $AVAX at ~2% or $sAVAX at 8% $QI yield.

Neither are super-juicy for me, but we can do that.

Arbitrage

Next, let's look at arbitrage. It does, indeed, exist. Here are the $AVAX -> $sAVAX trades on @traderjoe_xyz,  @Platypusdefi, and @pangolindex.

The best arb is on @traderjoe_xyz rn, but what is that arb? How will I find it?

SPREADSHEETS! ... (of course).

*I go oft to create it

Okay, our SPREADSHEET says that tiny, little arb ...

has a 77.70% annualized gainzorxen?!?!???!!

WOOT!

Arbitrage computation.

Are we done? ... well, kinda. Let's look at other $AVAX options before we commit to this one. There may be something better.

One more thing to check before we take arbitrage, and that is AVAX-pools.

• On @traderjoe_xyz is the sAVAX-AVAX pool, 4%

• On @pangolindex is the AVAX-QI pool (NOT farm), because:

• On @BenqiFinance, you stake the AVAX-QI pool, 61%

Arbitrage looks best. Let's do that.

The arbitrage, when the dust settled, was:

• SWAP 2 $AVAX -> 2.002 $sAVAX on @pangolindex

for a 75.92% annualized gain.

Now we have 2+ newly minted $sAVAX. I'm going to stake these into the @BenqiFinance supply at 8% until I put them into the infinite $AVAX well.

The. End.

Unfollow'd, ... back.

Prélude

Wanna see a magic trick?

I'm about to make some unfollowers ...

... disappear.

*plays spooky mood music 🎵🎶👻

Dear 274 unfollowers that I just unfollowed back.

Good bye: "God be with ye."

D-mn, that felt good.

That felt really, really good.

Sine qua non

To all my followers: thanks for hanging in with this curmudgeon. You may wonder why I'm a stickler in this.

Why is unfollowing an unfollower so important to me?

When I follow somebody, I give them a piece of me. If they don't follow me back, I lose, I cheapen this piece of me.

Look to yourselves, my dear followers. If you follow someone, you give them your self. What do you get in return?

If the answer is 'nothing,' then: what is your worth?

In God's eyes, and in mine, your worth is infinite.

Don't cheapen yourselves. Follow those who deserve it.

The Call

I put this challenge to you, my dear followers:

Unfollow back all your unfollowers. All of them. I don't care if that number is 2,000 unfollowers, as some of you have. Do this.

Then take stock of yourself, and tell me: do you feel relieved? better? more whole?

I do.

Then. When you've done that, and cleared the detritus from your life: then we can talk about how you can get from 100 followers to 2,500 followers in less than a year, as I did.

Then.

Automation

Automation be good, yes?

Why don't I have any? This is a question @snekforceone and others have asked.

Here's my answer.

I do have automation: my systems. I check my positions every day.

But also: I don't need automation.

Since I maintain δNeutral positions, the chance of me being liquidated is near nil, so I don't need to check it more than once a day, nor do I need automation to do so. Systems beat automation.

Every. Single. Time. 

Here's my take on automation. 

1. It makes you an automaton. I'm not a trader, so automation is not important, and I also get to sleep at night, and don't need to press 'ignore' 24,952 times each day. Automation is a big waste that you use once and regret forever.
2. Also, when you have automation, it means you have a defect in your system, or that you're using the wrong system. If your system doesn't, eheh, automatically entail work that NEVER should need to be automated, you need to create a better system, NOT sell out to automation.
3. Thirdly, I don't like automation, because it locks you into a way of seeing the world that is instantly no longer accurate, and it blinds you to opportunities that arise when you do see anomalies. You have no freedom of choice nor clear vision in automation. 

Automation has its place. Traders need it. I'm not a trader, so automation's place is 'not in my portfolio.'

That doesn't mean you can't use automation effectively. But it does mean I've never seen anyone who has. I'd love you to prove me wrong, but please don't kill yourself trying to do so.

I'm a yield farmer. I do the things, then I live my life. I like that balance. Automation, instead of freeing you to do more, only ties you down more and more to the computer screen: you become the automaton, a slave to the automation. I choose not to live that way.

I choose no automation.

Daily cryptocurrency income report, 2022-05-12

Daily #cryptocurrency income report, 2022-05-12: $108.02*

So, 'fun' day yesterday, eh, fam?

Let's get back to it, shall we?

*does not include auto-restaked yields nor x-token gains

Rekt

Rekt

Hey, folks, I'm rekt.

Let's face things squarely. $LUNA is at sh-tcoin prices. But is $LUNA a sh-tcoin now?

Some of you'll say 'yes,' and wash your hands of the whole affair. And that's fair.

But what if.

But what if the answer is 'no'?

I'll explore the latter option, folks.

Why can I explore the latter option?

Because I'm rekt.

If there's no salvageable position, then I have freedom to explore any option, and if it doesn't work? I'm still rekt.

So. What.

I have complete freedom now. I like it.

I'm rekt. And I'm free.

See you in the reports.

Mirror

I'm liquidating myself in @mirror_protocol.

This'll hurt.

But @mirror_protocol is capital-preserving, and now is not that time. Now is the time to strike while the iron is molten lava on the floor.

Bye, @mirror_protocol. I loved ye well. 😢

Steps for liquidating below.

Okay, let's liquidate $mDOT δNeutral position and see what comes out of it.

Step 1: On @mirror_protocol observe the shorted amount: 0.75 $mDOT 

Step 2: Withdraw that amount from your @SpecProtocol or @ApolloDAO. 

You may need to play around as the autocompounder may leave you with excess that you can grow for when the markets returns to sanity.

So, I'll leave like $5 or whatever minimum I can on the short side, too. 🤔

Step 3: cover the short with the $mDOT from the vault.

Step 4: record how much we recovered. 

On the short-side we got 9.4 $aUST

On the long-side (check back one tweet), we received 8.4 $UST

Worth it?

Nah. Transaction fees summed to ~$1.50. Let's liquidate the big fish first.

So we're not going to go with $mDOT (now), but this was instructive. Always try something with a smol amount FRIST!

So, procedure established. Now let's do this procedure on the big fish, which are: $mHOOD, $mNIO, $mNVDA, $mMSFT, and then the smaller fish come in.

Okay, so, let's start with those four mirrored assets. I have 0 savings ($aUST) and 10 $UST

... and I'm so tired. Got this head-cold thing going on, and a cough triggering an acute headache.

BLEH!

OKAY! SOLDIER ON! Let's SNARF the assets and see where we end with our savings.

First, biggest asset: $mHOOD

Short-side farm: 14.5 $mHOOD, 190 $aUST

Long-side vault: We'll take out 14.3 $mHOOD

Savings earned: 179 $aUST, 133 $UST

I was going to keep positions open, but I see they're charging a closing/adjustment fee, anyway, so I'll just close them going forward.

The May, 2022 Crash: some measures

Okay. Let's take a breath here and measure what happen.

Just before the crash, my portfolio was worth:

Assets,loans,total

$72,511.44 -$11,505.76 = $61,005.68

Interestingly, I have $22,000 invested

So my portfolio has 277.30% growth since inception.

Charts: 

Let's break down the damage protocol-by-protocol.

First up:

@anchor_protocol.

Hide your children's eyes. This may hurt.

@anchor_protocol, pre-crash was not even accurate, as I moved a total of 312 $LUNA in as collateral AND 1.74 $ETH. This sheet was pre-PRE-crash. Ugh.

This is @anchor_protocol post-crash.

What do we see? I went from 312 $LUNA and 1.74 $ETH to 25 $LUNA and 0.5 $ETH. Ow.

But my net-loss pre-crash to now is... ~ $1K ???

Why am I crying? A $1K net loss is nothing for a crypto-duderino. Not the full story, but not so bad, either.

What else?

I can pay off my $1K loan: this month.

No more liquidations on @anchor_protocol. 

That, right there, is worth it to me to make the Anchor BORROW just go away, and the liquidation(s) made that possible, reducing my borrow from ~$12K

Thank you, liquidations.

Okay, let's turn to the next set of liquidated positions: @mars_protocol. This was what my @mars_protocol looked like, pre-crash.

~$500 invested with a ~$1212 net asset value (assets - liabilities)

My post-crash @mars_protocol portfolio looks like this:

$276.21 investment (remaining), $122.85 NAV.

So, ~$1K loss, but there's more to this story: some good news as to how @mars_protocol liquidates positions. Let's dive into what happened with me. #SilverLinings 

Two liquidations: 

1. 8.37 $LUNA- 119.91 $UST, 646.59 $UST loan field

I was returned 10.26 $LUNA. That's a gain, not a loss.

2. 537.38 $ANC- 131.85 $UST, 980.09 $UST loan field

I was returned 357.09 $ANC, again: gain.

@mars_protocol returns your tokens PLUS in a liquidation.