Here’s how Terra traders use arbitrage to profit from LUNA and bLUNA

Top 5 total value locked on the top 5 blockchains. Source: Defi Llama　　Currently, Terra has only 14 protocols built on the chain, compared to the 257 protocols on BSC and the 377 that are on the Ethereum network. Terra‘s protocols have managed to attract liquidity very successfully, and the recent Astroport protocol launch coincides nicely with the swift rally of Terra’s native governance token, LUNA, to a new all-time high on Dec. 26, 2021.　　Looking at the TVL in United States dollars versus LUNA, the former has experienced exponential growth since September 2021 while the latter remains quite flat during the same period. It is not hard to see that the contributing factor to the recent increase in the U.S. dollar TVL is the increase in LUNAs price itself.　　Terra TVL in USD (left) vs. in LUNA (right). Source: Defi Llama　　While price increases in the governance token often show investors confidence in the chain and the protocols, it seems to also produce more lucrative arbitrage opportunities.　　Lets take a closer look at some of the strategies used to arbitrage between LUNA and its bonded asset bLUNA.　　LUNA price vs. Luna/bLuna premium in %. Source: Flipside CryptoWhy are there spreads across Terras markets？　　LUNA is the