Hi friends 👋

Wouldn’t it be great if you could buy ETH at a discount to the market price?

Well you can, if you know where to look.

But before we get there, we need to first talk about lending and borrowing.

If you have some ETH for example, you might want to borrow against it. You can then either spend the money you borrow, or reinvest it.

However, if you do this, you need to make sure that your loan-to-value (i.e the amount you have borrowed compared to the value of your assets) doesn’t fall below a certain level.

This is to protect the people that have lent you money, to make sure they always get their money back.

If the price of the asset you using as collateral falls sufficiently, your ETH will be sold to pay back the people that lent you money - this is called being liquidated.

So now we have a basic overview of how borrowing and lending works, how can we get discounted ETH?

Enter Kujira.

Kujira, which means ‘whale’ in Japanese, has a mission statement I love: Everyone deserves to be a whale.

Their goal is to build apps that help level the playing field for regular users.

Their first app Orca, lets anyone participate in liquidation auctions.

Kujira is connected to the Anchor protocol, which we have previously talked about as a great way to earn ~20% on your stablecoins. In addition to earning yield on your UST, you can also borrow against Luna and Eth.

When the price of Luna/Eth falls and users are liquidated, the liquidated assets are set to Kujira where anyone can bid on them.

This is what the Kujira platform looks like.

It looks a little intimidating, so let’s break down how it works.

Along the X axis, you can see the percentage discount, and the blue bars represent the amount of bids at that level.

Each level is called a ‘pool’ and the smaller pools get emptied before going to the next pool.

So you can see there is a very small number of bids at the 1 and 2 percent discount level, and the number of bids steadily increases as the discount increases.

If a large number of people get liquidated due to volatility in the price, then the lower discount pools will quickly be used up, and the liquidations continue into the bigger discount pools.

The red bars indicate how many times that pool has been emptied.

So you can see the 10% pool has only been emptied once.....so far.

All you have to do to take part is decide how much of a discount you would like, and place your bid.

You do this by clicking the blue bar at the discount you want, and you see the discount amount updated.

Obviously the higher discount you are asking for, the less likely your bid is to get filled.

When you place your bids you will have to pay a couple of small fees (around 1 UST), once to place the bid and another to ‘activate’ it, for reasons that are not clear to me!

Then you will see all your live bids at the bottom of the page, and you can withdraw at any time.

There is an opportunity cost here, because whilst your bid is active your UST is locked up and is not earning yield, as it could be if it was just deposited in Anchor.

If you manage to snap up some cheap ETH or Luna on Kujira, let me know in the comments.

Happy hunting whales! 🐳

Jamie

P.S. New year, new name. At the start of this year I rebranded this newsletter from Block Breakdown → Block Explorer.

What do you think of the change? Better? Worse? Don’t care?

🚨 Disclaimer: This is not investment advice. Everything in this newsletter is for entertainment and education purposes only. Do your own research. You should assume that I have invested in any and all the projects mentioned. In the unlikely event I receive a financial reward for linking to a project, that will be clearly highlighted.