Thread by @TerraBitesPod

1/ Here's an insightful Telegram msg from @d0h0k1 this morning on $ANC $LUNA & $bLUNA, the liquid staking derivative of LUNA.

Original: t.me/TerraLunaChat/…

The rest of this thread is his answer to the question "Isn't bLuna strictly better than having Luna staked directly?"

2/ Not really. Keep in mind that bLuna is just a wrapping smart contract that stakes to a validator of choice on your behalf, and issues you a token proving you have assets staked.

3/ It's kind of a coatcheck experience where they give you a stub proving you have a coat checked in with the contract … to claim your Luna tokens from the contract directly, you still have to wait the 21 days … The bLuna contract has no special privileges over the base layer.

4/ Where things get interesting is that 1) bLuna tokens can be utilized to do interesting things (like farming ANC, or borrowing UST) and 2) there will be a bLuna-Luna pair on Terraswap. This will allow users to fast-exit into Luna when they need to.

5/ Here are the downsides: when the price of Luna is correcting quickly, likely most bLuna-Luna liquidity is going to evaporate, making fast exits very expensive.

6/ Assuming efficient markets, the cost of exiting bLuna through Luna will approximate whatever cost you would suffer in the 21 day unbonding period (or how the market values it).

7/ Furthermore, the ability to claim airdrops in bLuna is not built on day 1, and would take some work to build.

8/ This means that when Anchor goes live and you are farming ANC with bLuna, you are forfeiting rights to the MIR & ANC airdrops that are accruing to your base position. Likely when the airdrop claim functionality gets claimed, however, this will be able to claimed retroactively.

9/ All in all, $bLuna is a great instrument, but realistically there are tradeoffs.

Stake $Luna if you want to bet on the entire ecosystem, farm $ANC if you want to make a concentrated bet on #Anchor. /fin