Terra Land — Loan Farming
When entering the TERRA ecosystem, we wanted to make our project open to all community members. We introduced the possibility to tokenize, verify and trade real estates using Terra Blockchain and $UST — the best decentralized stable coin in the cryptosphere.
However, this was still not enough for us!
We started to think about how else we could use the potential of Terra Land. With the governance function already implemented, we want the community to decide which property is “hot or not” to list on the platform.
But that’s still not the best we have in store!
Since #TLANDERS will be purchasing real estate tokens representing the value of the real property, why can’t they provide it as collateral and perform loan farming like on Anchor Protocol?
Once a property has been purchased, through the built-in governance system for each property, we will allow the community to decide whether to release equity from the property. If 51% of the equity owners of a property agree to this, we will carry out the capital release process and deposit the funds into a smart contract at $UST.
Those who hold the respective real estate token can send it to the smart contract as collateral and take out a loan in $UST at an interest rate of 6–10% (depending on the amount of $TLANDs staked) and use it for example, in LP farming or in the Anchor Protocol.
What’s even more exciting, for taking a loan and depositing real estate tokens users will receive $TLAND tokens! This is what “loan farming” really is!
Here are some examples:
T1: If $TLAND is 5% of the value of the loan at the time it was taken out, then as long as it is blocked on the smart contract, the borrow APR is 10% while you receive + 15% APY in $TLAND tokens!
T2: If $TLAND is 10% of the value of the loan at the time it was taken out, then as long as it is blocked on the smart contract, the borrow APR is 8% while you receive + 25% APY in $TLAND tokens!
T3: Similarly if $TLAND equals 20%, then the borrow APR drops to 6% while you receive 50% APY in $TLAND.
Importantly, the value of the collateral will always be fixed for the duration of the loan, so users will never have to top up the deposit in order to avoid loan liquidation, as is the case with the other protocols.
Allright, it looks like that’s it for now but do not worry! We’re still having many exciting features to announce like NFT integration, “property on demand” and many others so stay tuned and brace yourself for the upcoming $TLAND IDO.