Terra is considered one of the most notable blockchain platforms with a steadily increasing TVL over time. With regard to the AMM landscape on Terra, Terraswap is the earliest AMM to function on Terra. However, as of now, many other AMM protocols have also appeared and offered their own outstanding features.
In this article, let’s find out about an AMM project on Terra - Loop Finance and its potential to grow in the future.
What is Loop Finance?
Loop Finance is a project built on Terra and includes 2 main products: Loop AMM and Loop Wallet:
Loop AMM: It has the same AMM model with Uniswap on Ethereum and Terraswap on Terra. Users provide liquidity and earn rewards from a share of transaction fees. With Loop AMM, users are able to trade not only Terra native tokens but also tokens from Ethereum, BSC, and Solana via Wormhole Solana-ETH POA bridge or Terra Bridge.
Loop Wallet: To bring cryptocurrency applications to mainstream users, Loop Finance develops a mobile, non-custodial wallet, which enables users to spend their cryptocurrencies directly with merchants. In the future, Loop Wallet will look like a shopping app, where users can purchase goods from local businesses.
Besides that 2 main products, Loop Finance also defines itself as a tokenized community on Terra. Users can create content on Loop Finance and earn tokens as returns.
How does Loop Finance work?
Two Loop Finance products are not separate but closely connected and capture value for each other. Loop Wallet is integrated with Loop AMM so that users can pay for their goods with any Terra tokens.
When users choose a currency to make purchases, an instant swap mechanism will happen on Loop AMM so that merchants will receive stablecoin from users after the swap. People are even rewarded LOOP for making purchases on Loop Wallet
This mechanism creates 2 flying wheels for both Loop Finance in particular and Terra as a whole:
- For Loop Finance: People want to get LOOP token ⇒ Choose LOOP Wallet to make payment ⇒ Number of transactions on LOOP AMM increases ⇒ LOOP AMM captures value and so does its token.
- For Terra: More payment via LOOP Wallet ⇒ The demand for stablecoin on Terra, which is most likely to be UST, increases ⇒ The Buy Demand for UST increases ⇒ The whole ecosystem may develop accordingly ⇒ Loop Finance as a project on Terra also benefits from the growth of the whole ecosystem.
What is a LOOP token?
LOOP is the native token of Loop Finance. LOOP can be used for both governance activities and many other use cases, which will be discussed later.
Detailed information about LOOP token
LOOP Price Today
LOOP Key Metrics
- Token Name: Loop token
- Ticker: LOOP
- Blockchain: Updating...
- Token Standard: Updating...
- Contract: Updating...
- Token type: Governance
- Total Supply: 1,000,000,000 LOOP
- Circulating Supply: 7,000,000 LOOP
LOOP Token Allocation
LOOP Token Sales
Private Round: This round started in May with a sales price of $0.0134 per token. The total amount raised is $1.5M.
- Pylon: Users deposit UST to earn LOOP (The number of reward LOOP depend on the size of total UST deposits)
- StarTerra: The total amount that will be raised on Star Terra is $2,875,000.
LOOP Token Release Schedule
LOOP Token Use Cases
LOOP token has several use cases as follows:
- Governance: (Upcoming) Users stake LOOP tokens to vote on community grants, protocol updates, and parameter changes.
- Earning transaction fees: Users provide LOOP as one side of the liquidity pair to earn transaction fees on LOOP AMM.
How to get LOOP token
At the moment you can get LOOP by using LOOP wallet or joining its public sales of StarTerra/ Pylon…
How to buy LOOP token on Coin98 Exchange
How to store LOOP token on Coin98 Wallet
Loop Finance Roadmap
Team, Investors, and Partners
- Tom Norwood (CEO): Details here.
- Simon Rahme (COO): Details here.
- Marcela Rodriguez (CFO): Details here.
Loop Finance has 4 advisors: Chad Stephens (details here), Anjan Vinod, Avishay Ovadia, Eylon Aviv.
Loop Finance has raised over $1.5M from leading VCs and investors such as Woodstock, Accomplice, Collider Labs, and Iconium.
Loop Finance is partnering with many projects on the Terra ecosystem: Angel Protocol, Pylon Protocol, Akash Network, Loterra, Spar, Neptune, Apollo, Kujira,...
Is Loop Finance (LOOP) a good investment?
I hope that from all the mentioned information, you can get a basic understanding of Loop Finance to start researching more about this project. It is hard to tell firmly whether any project/ token is a good investment or not.
However, I will provide you with some key highlights of Loop Finance so that you can do your own research and make your own investment decisions.
Loop Finance is built on the Terra blockchain, which sees promising growth in the future. From the chart below, you can see that Terra TVL from July 2021 did not record a skyrocket pump but still increased steadily. Terra may be under the phase of accumulating capital and attracting more uses to prepare for more impressive growth in the future.
At the moment, the AMM sector on Terra includes 3 projects: TerraSwap, Astroport và Loop Finance. Among these, Terraswap is still the dominant AMM as it captures the most liquidity in the ecosystem. Looking at the comparison below, you can see that Loop Finance is far below Terraswap in terms of both volume and liquidity. Its volume is 3.37M UST compared to 30.21M UST of Terraswap while its liquidity is approximately 0.01 that of Terraswap.
However, Loop Fiance still has its own strengths that we can pay attention to. For instance, Loop Finance makes use of the bridge to increase capital for Loop AMM. It also has quite an interesting flywheel model between Loop Wallet and Loop AMM. If Loop Finance successfully partners with many local merchants on its wallet, it can bootstrap more liquidity for Loop AMM in the future.
Some similar projects:
- Uniswap (UNI): Ethereum-based DEX.
- Terraswap: The fist AMM DEX on Terra.
That is all you need to know about Loop Finance. If you want to have more information about this project, feel free to comment down below. You can also join our community at Coin98 Community to discuss any topic that you are interested in.