The Holiday Hangover: A Crypto Crash
As the new year kicked off, cryptocurrency enthusiasts found themselves facing a not-so-great start. Ether (ETH), once riding the high of a November peak at $4,800, plummeted to under $3,000 within days. Similarly, Terra’s LUNA token dropped from a shiny $85 to a mere $67 during the same timeframe. Talk about a party foul!
Liquidation: The Shady Underbelly of the Crypto World
Such dramatic dives in value typically result in liquidation cascades, where over-leveraged positions in lending markets are forcibly sold off. But here’s the kicker: these downturns can unveil unique bargains in the liquidation markets. Enter the Kujira’s Orca protocol, a gem for keen-eyed investors.
Diving Into Kujira: How It Works
Kujira’s Orca protocol operates within the Terra network, allowing savvy investors to bid on liquidated assets like bETH (bonded Ether) and bLUNA (bonded LUNA) at discounted rates. As one pseudonymous analyst from Kujira brilliantly quipped, “Liquidation has for so long been the ‘shady underbelly’ of lending platforms that the average user barely knows it exists—let alone how they can profit from it!” With Kujira, anyone can join the liquidation fray, scoop up some assets, and potentially come out on top.
Mastering the Bid: Your Playbook
Want to snag some bETH or bLUNA during a market nosedive? Follow these foolproof steps:
- Connect your Terra wallet to the Kujira platform.
- Select the asset you wish to bid on—currently bETH or bLUNA.
- Choose your premium percentage (this is your discount off the current spot price).
- Click “Place My Bid” and wait 10 minutes before activating it in the bidding queue.
- Once your bid is accepted, withdraw the asset and pay any applicable fees.
Three golden rules to bear in mind: always set a premium greater than 1% (to beat network fees), activate multiple bids together to save, and remember that bids are filled fairly, proportionate to size at the selected discount.
Timing Is Everything: The Sweet Spot for Bidding
So when should you make your move? Generally, when there’s a significant drop in price causing a spike in liquidations. Picture this: as lenders scramble to cover their over-leveraged positions, the number of available liquidation assets increases. That’s your cue to pounce!
Historically, investors could snag bETH and bLUNA at discounts ranging from 9% to 12% during severe market dips. Sell-offs in early January 2022 were particularly bountiful.
While You Wait: Why Not Earn?
Now, while you’re anxiously waiting for your bids to fill, why not put your UST to work? Deposit it into Anchor’s Earn feature, where you can net a sweet 19% APY. You’ll accumulate interests while you wait, and once your bETH or bLUNA hits your wallet, swap that aUST back into UST and enjoy your discount! Talk about multitasking!
With careful strategy and a little patience, investors have a chance to turn market losses into lucrative buying opportunities. As they say, when life gives you lemons, make some delicious lemonade… or in this case, a mean bETH or bLUNA at a discount!
