Let’s talk about a serious opportunity. We’re all here because we believe in Zilliqa tech—its sharding capabilities, its security, and its unique position in the crypto world. But let’s be honest, even the best tech needs robust liquidity and vibrant economic activity to truly thrive. We need to think strategically about how to put our assets to work in the most efficient ways possible.
And that’s where a fascinating possibility opens up. You’ve probably heard whispers about the Terra ecosystem’s rebuild and its Liquidity Alliance, spearheaded by projects like Eris Protocol. The yields over there are, frankly, eye-watering. The immediate thought might be, “That’s a Terra thing, what’s it got to do with us?”
Well, everything. I believe we can build a strategic bridge that not only generates significant returns for our community but also fuels Zilliqa’s own growth in a powerful, self-reinforcing cycle. Here’s a concrete strategy on how we can do it.
The Core Idea: The Zilliqa-Terra Liquidity Bridge
The plan is elegant in its simplicity: we become smart capital allocators. We borrow against our ZIL and other ZRC-2 assets at low rates from any DeFi ecosystem that offers them, and we deploy that capital into high-yield strategies within the Terra liquidity alliance, specifically via Eris Protocol.
Think of it as a financial arbitrage that benefits our entire chain. We’re not abandoning Zilliqa; we’re using external opportunities to supercharge the value we bring back home.
The Step-by-Step Strategy: From 10% to 200% APR
This isn’t just theoretical. It’s a actionable plan that hinges on accessing cheap debt and deploying it intelligently.
Phase 1: Sourcing Low-Cost Capital (<10% Borrowing Rate)
The first step is finding a cheap loan. We don’t want to sell our ZIL—we want to use it as productive collateral. The goal is to borrow a stablecoin like USDC or USDT for less than 10% APR. Where can we find this?
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Ethereum Lending Protocols (Aave, Compound): This is the most established option. While gas fees can be high, the borrowing rates for stablecoins often dip into the single digits, especially during periods of low volatility. By using ZIL as collateral on a bridge like PolyNetwork or a cross-chain messaging service, we can tap into this deep liquidity.
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Neutral EVM Chains (Avalanche, Polygon): These chains often have competitive lending markets with lower transaction fees. A protocol like Aave on Polygon could be a perfect hunting ground for a sub-10% stablecoin loan.
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Native Zilliqa DeFi (A Future Goal): Honestly, this is the dream scenario. The endgame of this strategy is to demonstrate the need for and eventually fuel the development of our own mature lending markets on Zilliqa. Imagine getting a cheap loan directly on ZilSwap without ever leaving our ecosystem. That’s the destination.
The key here is to use our collective ZIL holdings as a foundation to raise stable, cheap capital.
Phase 2: Deploying on Terra via Eris Protocol (Targeting 200% APR)
Once we have our stablecoin capital, we cross the bridge to Terra. The destination? The Eris Protocol and the broader Terra Liquidity Alliance.
So, what exactly is Eris Protocol? In short, it’s a powerhouse for liquidity provisioning and yield generation, built around the new LUNA (LUNA 2.0). A core part of its strategy involves their “Liquidity Alliance,” a pact among projects to provide deep liquidity for key assets, primarily the LUNA-USDC pair.
The high APR—that 200% figure—comes from a combination of sources:
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Trading Fees: By providing liquidity to a LUNA-USDC pool, you earn a percentage of every trade.
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Liquidity Incentives (Rewards): The Liquidity Alliance and protocols like Eris heavily incentivize providers with their own native tokens (e.g., ERIS, ASTRO from Astroport). This is where the bulk of that outsized APR comes from—these extra token rewards.
So, the move is straightforward: take the borrowed stablecoins, convert a portion to LUNA, provide liquidity to the LUNA-USDC pool on a Terra DEX like Astroport, and then stake that LP token in Eris Protocol to capture the full spectrum of fees and incentives.
Phase 3: Managing the Position and the Profit Cycle
This isn’t a “set it and forget it” play. It’s an active strategy.
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Yield Harvesting: We’d regularly harvest the earned ERIS, ASTRO, and other tokens.
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Profit Realization: A portion of these rewards would be immediately sold back into our borrowed stablecoin to cover the interest payments and build a safety net.
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Compounding & Returning Value: The remaining profit—the pure upside—is where the magic happens for Zilliqa. This is fresh capital that we can cycle back to strengthen our own ecosystem.
The Convincing Argument: Why This is a Win for Zilliqa, Not a Betrayal
I know some might worry this directs value away from Zilliqa. I see it as the complete opposite. This is a classic “use external resources to fuel internal growth” strategy. Here’s why it’s a massive win for us.
1. It Turns Our ZIL into a Productive Asset, Not a Dormant One.
Right now, a lot of ZIL is sitting in wallets or staked for a modest return. This strategy transforms it. By using it as collateral for a loan, we aren’t selling it; we’re giving it a job. We’re creating a new, powerful utility for holding ZIL: it becomes a key that unlocks high-yield opportunities elsewhere. This increased utility can directly support and even increase ZIL’s value.
2. It Attracts a New Class of Capital and Developers to Zilliqa.
Success attracts attention. When the broader crypto space sees the Zilliqa community executing sophisticated, cross-chain yield strategies, it sends a powerful message. It shows we’re financially savvy, we’re proactive, and our ecosystem is a launchpad for advanced DeFi activity. This attracts yield farmers, DAO treasuries, and developers who want to build where smart capital is congregating.
3. We Generate a War Chest to Fund Our Own Ecosystem.
This is the most critical point. The profits generated from this strategy don’t just vanish. A community-led DAO or fund could manage a treasury from these yields. This treasury can then be used to:
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Boost liquidity on ZilSwap for key ZRC-2 pairs, lowering slippage for everyone.
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Fund grants for new developers building the next killer app on Zilliqa.
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Create our own liquidity mining programs to rival those on other chains.
We’d essentially be using Terra’s high yields to bootstrap and supercharge Zilliqa’s own DeFi landscape. We’re not just taking; we’re recycling and amplifying.
4. It Pushes for the Development of Native Zilliqa Primaries.
The very act of executing this strategy highlights a gap: the need for a robust native lending protocol on Zilliqa. The demand we create for leveraged yield farming will be a siren call for developers. The ultimate goal is to make this entire process internal. Instead of borrowing on Ethereum, we’d borrow on a Zilliqa-native Aave clone, using ZIL as collateral. This strategy creates the economic incentive to build that missing piece.
The Bottom Line
We have a chance to be strategic, to use our assets not as passive spectators but as active builders of our own future. By bridging to the Terra Liquidity Alliance, we aren’t leaving Zilliqa behind—we’re building a pipeline that brings value, attention, and growth back home.
Let’s start the conversation. Let’s form a working group, assess the risks in detail, and explore how we, as a community, can pilot this strategy. The tools are there. The yields are there. All we need is the collective will to build the bridge.
The question is, are we ready to put our ZIL to work?