aUST Composability on Polygon

Given Anchor Protocol’s 19.4% apy on UST on the Terra blockchain, there is no incentive for UST holders from Terra to bridge their UST to polygon. However, once UST is staked on Anchor, aUST holders can benefit from Polygon’s diverse DeFi ecosystem by bridging the aUST via wormhole. Polygon Native dexes would have to provide 25%-30% apy for UST holders for them to bridge UST directly, which is inherently unsustainable. However, wormhole wrapped aUST can be used in a multitude of Polygon native protocols. Typical yield farming possible on Polygon is much easier than the popular dApps on Terra, such as Mirror finance. aUST can be used as collateral on popular Polygon dApps such as QiDAO, Abracadbra money and Nasdex and as margin on derivative platforms like Synfutures, Pods etc. Then one can use the tokens from Polygon dApps and either provide liquidity on dexes, mint synthetics, yield farm, or engage with any dApp that accepts popular Polygon stable coins like MiMatic or Mim. While it is not economical to bridge UST directly to Polygon, bridging aUST can enable users to earn more apy on their initial UST and expand UST’s use cases in DeFi, even engaging in delta neutral strategies. The composability of aUST on Polygon can enable a win-win synergy for both Terra and Polygon users alike.

1 Like

@offdeblockchain this may be a better fit on the Anchor forum but I will provide some feedback below.

Leveraging aUST across networks has a ton of merit - and aligns with the Anchor team’s goal of expanding across chain. A few questions about your proposal:

What makes it “easier”? Is it lower costs and fees or a greater range of choices available to users?

2nd - I enjoyed your graphic showing the flow of funds across DeFi protocols. Is there a specific Mirror fork you allude to? I am unaware of such a product that currently exists on Polygon.

1 Like

For your first question, it is easier in both senses. Lower fees for transactions, but more importantly there is a wider range of choices available for users on Polygon. Certain plays on polygon can be done directly which require multiple steps through terra.