Happy Monday, folks. We’re kicking off the week by highlighting some of the best Terra data dashboards from the past week.
Let’s dive in.
Partnerships, support, and buzz fuel LUNA volatility
We’ll start with a look at recent LUNA price volatility. As we can see in the graph below from @jr3225’s submission, LUNA has a higher percent standard deviation each day over the past two weeks, except July 18th. While both tokens have increased substantially, LUNA remains more volatile over the last 2 weeks.
The reasons for this volatility, and in particular for the recent price increase for LUNA? @jr3225 points to three main causes: new projects, partnerships, and bridges such as the recent bETH announcement, support from Terraform labs, and some recent buzz from a session on “The ₿ Word |Bitcoin as a Tool for Economic Empowerment.”
LUNA price increase feeds fewer Anchor deposits
That increase in the price of LUNA is having ripple effects throughout the Terra ecosystem. On Anchor, for example, it seems that the LUNA run-up is causing users to deposit less.
As we can see in the graph below from @shreyashpatodia, deposits on Anchor fall as the price of LUNA climbs. This, according to the submission, is likely because “there was more upside to be had in the market by investing in more risk-on assets users started depositing less the Anchor.”
As @TZMCrypto notes in the submission, this growth is heavily impacted by “sudden upward movements” in the price of LUNA and ANC. Notably, these spikes in price tend to have a heavier impact than drops in price wield, helping to sustain growth on the platform. Mirror’s TVL, meanwhile, is much more likely to be impacted by environmental triggers, including the price of LUNA and ANC
Increased LTV leading to increased borrowing
TVL isn’t the only thing on the rise when it comes to Anchor — as we can see in the graph below, the Loan to Value, or LTV ratio, of Anchor has also been on the rise.
And as the LTV of Anchor has continued to climb, borrowing has increased. That’s evident in this next submission from MarneeSeaweed. As the submission points out, UST borrowing has increased since the LTV hit 60%. Interestingly, however, this has not led to a significant increase in the amount of bLUNA provided as collateral. This is likely because the rewards for borrowing have declined, meaning users are content to take out more UST with the bLUNA they’ve already supplied.
May crash leads to increased UST burns
We’ll finish off our look at this week’s best submissions by examining UST collateralization. As @shreyashpatodia points out, in order for UST to be able to maintain its peg, there must be a high volume of UST to LUNA swaps so that the peg remains tight at all times.
Fortunately, as we can see in the graph below, that’s exactly what’s occurring. There was a more than $35 million UST (shown by the spike in the green line) burned in late May, and again more recently. According to @shreyashpatodia, this is “extremely good for UST” as “the ability to keep its peg…depends completely on arbitrageurs stepping in and minting LUNA and UST.
Do more with Terra data 🔍
That does it for this week. Thanks to everyone who submitted such great Terra data dashboards! Want to get more involved with the Flipside community and see your own submissions on our blog?Join us on Discord to get started.