With the recent events on Terra involving $UST and $LUNA, Terra assets liquidity providers will receive impermanent loss protection on the THORChain network.
With the recent events on Terra involving $UST and $LUNA, Terra assets liquidity providers will receive impermanent loss protection on the THORChain network.
THORChain is neutral to the assets on it, as long as they are not malicious.
— THORChain #THORFI (@THORChain) May 12, 2022
Terra assets have Impermanent Loss Protection.
LPs are 30 days in, full protection at 100 days (2 months from now).
Onwards. $RUNE https://t.co/Oh8xoH0BWY
THORChain provides Impermanent Loss Protection (ILP) to liquidity providers to help mitigate risks to providing liquidity on THORChain. Rune from the Protocol Reserve funds this coverage.
Luna and UST pools are miss-priced due to Terra halt.
Using market prices (coingeko) the following liability can be calculated:
Current ILP Liability for THORChain
UST: 108,556 RUNE
LUNA: 203,522 RUNE
TOTAL: 312,078 RUNE
Current Reserve Balance
111,312,196 RUNE
(Standby Reserve: Additional 60,000,000 RUNE)
Terra ILP Liability 0.28% of Current Reserve.
Even in extreme circumstances THORChain’s design can mitigate impacts to LPs.
Terra is still halted. Expect more updates as the situation develops.
