What Is Bonded Luna (BLUNA)? How It Works & Where To Buy It

Bonded (bLUNA) is a unique liquid staking derivative that is used for collateral on the Anchor Protocol platform.

The Anchor Protocol is one of the most well-known staking platforms in the crypto space, and at one point had more than $16 billion in total value-locked.

Learn more about Bonded Luna, how it works, where to buy it, and more below.

Sections

How Bonded Luna (BLUNA) Works

The bLUNA token is Anchor Protocol’s novel liquid staking derivative available for collateral. The Anchor Protocol, supported by block rewards from prominent PoS blockchains, facilitates stablecoin deposits to receive consistent revenue. Anchor employs bAssets, which are connected assets that reflect the blockchain-enabled possession of a PoS asset (point of sale asset).

bAssets, like their unbound predecessor, enable token holders to collect block rewards earned via staking. bAssets, though, are also transferrable and replaceable, which is how bLUNA enters the equation.

bLUNA assets represent the amount of LUNA staked. Tokens are created after initiating a deposit and are destroyed when redeemed. bLUNA tokens are tied to LUNA 1:1, staked using a whitelist validator, and earn wagering rewards in UST on Terra. Holders of bLUNA may trade using their staked reward asset, allowing staked LUNA to be utilized on any financial instruments, including as collateral at Anchor.

bLUNA tokens may be used to do a variety of fascinating actions, such as growing ANC yields and lending UST. Lido Finance, a staking protocol, enables LUNA holders to stake LUNA as well as engage in a variety of unique DeFi protocols using such methods.

The Terra team originally controls bLUNA, however, this was supposed to be handed to Lido DAO. The Lido Governance Token (LDO) controls the Lido protocol but was expected to be extended to the bLUNA where token holders would have voted on Luna protocol-specific settings (rates, validators, etc).

Users seeking more detailed information can read through the Defichain whitepaper.

What Is Bonded Luna (BLUNA) Used For?

The purpose of bLUNA is to serve as collateral for Anchor protocol (built atop Terra blockchain) loans at some point in the future. Consider this to be a receipt for the LUNA that you have staked, the yield of which may be sent into Anchor in order to reimburse depositors. This is exactly what will take place if you choose to convert your LUNA to bLUNA and then borrow money against it.

If the amount of your loan is more than a predetermined value of your collateral, you will be required to sell your bLUNA in order to satisfy the debt. This could take place if the market experiences a decline, compelling the protocol to liquidate its depositors’ bLUNA holdings in order to protect them.

On the other hand, if bLUNA is not put up as collateral for a loan, it may perform similarly in nature to that of standard LUNA. The front end of Anchor gives you the ability to redeem the staked-related bonuses associated with your bonded LUNA.

The fact that LUNA is a liquid asset whereas bLUNA is not, is the most important difference to make when comparing LUNA and bLUNA. It isn’t locked, and there is a 21-day unbonding period before it may be staked (to earn staking rewards or receive staking rewards). This is in contrast to bLUNA, which is locked. This potential cost may occasionally result in price discrepancies between LUNA and bLUNA, despite the fact that it can be redeemed for one LUNA for every one bLUNA that is purchased.

If there is a price differential between LUNA and bLUNA, then there is the potential for arbitrage to take place. For instance, during a flash collapse, if the price of bLUNA falls relative to LUNA by 20 percent because everyone is moving into a more liquid asset, arbitragers who want to collect more LUNA may purchase bLUNA at a discount.

After that, they have the option to withdraw the underlying LUNA that is associated with the bLUNA, which would result in their receiving 20 percent more LUNA than they would have received if they had purchased it directly from the markets. Users can exchange LUNA for bLUNA and vice versa. With Lido bonded LUNA, similar options are available.

Additionally, some individuals choose to participate in day trading or swing trading using tokens as their asset of choice. They aim to make money off of shifts in the market that provide them the opportunity to do so. It’s possible to make money doing this, but it’s not without its risks.

Where To Buy Bonded Luna (BLUNA)

Users can’t buy Lido bonded LUNA on the open market but can earn the staking token by staking on the Lido platform. When making use of Terra’s decentralized exchange, LUNA can be staked to receive bLUNA tokens in return.

Users wanting to purchase on centralized cryptocurrency exchanges must first deposit currency into an exchange. This is necessary before buying tokens on a centralized exchange. Your particular digital wallet on the exchange will then be credited with the tokens you purchased.

You can purchase, trade, and store tokens at the crypto exchanges listed below:

Before purchasing any tokens on a centralized exchange, users must be aware of the risks. When a user stores tokens on an exchange, it effectively implies that their private keys are no longer theirs, since their tokens may be lost if the exchange is hacked.

The majority of individuals store their tokens in a digital or physical wallet. There are several DFI token wallets on the market. Probably the most well-known and dependable digital wallet is MetaMask.

FAQs About Bonded Luna (BLUNA)

How long has Bonded Luna (BLUNA) existed?

Bonded LUNA only recently became a prominent digital asset in the crypto space. This was mainly due to the rise of the Anchor Protocol and LUNA’s success (before its ultimate capitulation).

What’s controversial about Bonded Luna (BLUNA)?

The decentralized finance sector is incredibly appealing to both retail and institutional investors. The sector is flourishing and new developments are taking place constantly – however, the sector is also vulnerable to exploits. Many of these exploits have cost users millions of dollars in recent years.

Individuals should always evaluate both accurate and rational information while investigating projects. Before investing money in any cryptocurrency project, you should gain as much knowledge as possible.

Let’s take a look at the biggest controversy surrounding DeFiChain (DFi).

Anchor Protocol Collapse – The most severe event to occur in 2022 was the de-pegging of UST that eventually led to the collapse of LUNA and billions of dollars being lost. The event that occurred rocked the crypto space and devastated an enormous amount of individuals, some of whom endured life-threatening losses.
Since the collapse, the LUNA token has now changed to ”LUNA Classic” and the new token released by Terra is aptly named ”LUNA”.

How many Bonded Luna (BLUNA) tokens are there?

At the time of writing, Bonded Luna (BLUNA) was not accurately tracked on any of the reputable coin tracking and listing websites.

Since the collapse of LUNA, many of the staking tokens and bonding tokens associated with LUNA have completely disappeared from the market.

Can Bonded Luna (BLUNA) be mined?

Bonded LUNA (bLUNA) can’t be mined. Users aren’t able to mine BLUNA and the tokens require the presence of LUNA in the process of issuance. Users are, however, required to initially use fiat currency to purchase LUNA and then utilize this LUNA on the Anchor Protocol.

Additionally, users often utilize DeFi products on decentralized platforms (such as Anchor Protocol) to earn additional rewards on their tokens. In recent years, this has become an incredibly lucrative option that has helped many individuals to earn significant rewards.

What is the market cap of Bonded Luna (BLUNA)?

The market cap is not currently tracked on any of the major coin tracking sites such as CoinMarketCap or CoinGecko. This is likely due to the major events that took place surrounding LUNA earlier this year. The circulating supply of the token is currently untracked.

Biggest Competitors Of Bonded Luna (BLUNA)

There is no specific competition to bonded LUNA, this is mainly due to the nature of the token and its actual use case. However, among the platforms such as Lido and Anchor Protocol which provide staking services – there are several competitors.

The biggest competitors of Lido and Anchor Protocol (DFI) are:

What Are The Future Plans For Bonded Luna (BLUNA)?

Anchor protocol, which is the platform that handles bonded LUNA, is actively working to extend its reach and grow its user base. The protocol quickly garnered extensive attention in recent months but the total value-locked in the protocol dropped significantly after the LUNA crash.

Going forward, the protocol will look to rebuild and grow a valuable ecosystem of digital products.

Pros And Cons Of Bonded Luna (BLUNA)

Pros

Liquid staking – The Anchor protocol offers liquid staking which gives staked assets more versatility and earning potential on the deFi platform.
DeFi sector – Bonded tokens like the BLUNA token are quickly garnering attention in the crypto space. The decentralized finance sector is flourishing and protocols like Anchor will actively seek to dominate the DeFi sector.

Cons

LUNA collapse – The LUNA token suffered one of the most severe crashes in crypto history earlier this year. The token was trading at more than $100 and within 4 days was trading under $0.01.