Anchor Protocol (ANC)

What is Anchor Protocol?

Anchor is a decentralized money market built on Terra that offers UST (Terra's USD-pegged stablecoin) depositors a stable 20% annual percentage yield (APY). Borrowers can collateralize UST loans using bonded LUNA (bLUNA), Terra's native token. Anchor plans to expand support to other Proof-of-Stake (PoS) layer-1s such as Solana's native token, SOL. The protocol earns a return for the depositors by staking borrowers' LUNA collateral. ANC is Anchor's inflationary protocol token, offering holders governance rights as well as a percentage of protocol earnings.

Oustanding Feautures

What is the project trying to achieve?

Anchor Protocol can thus attract risk-averse investors looking for high-yield, low-volatility investments and increase demand for UST. This advances the adoption of UST as a stablecoin and subsequently the adoption of the Terra project in DeFi. With the increasing adoption of Terra, whose founders are behind the launch of Anchor Protocol, the price of LUNA will increase

What is the unique selling point?

Anchor stands out from countless other money market protocols like Aave and Compound thanks to its elegant user interface and simple-to-use functionality. The protocol’s core value proposition is connecting borrowers and lenders by offering the former a way to borrow in stablecoin without forfeiting their investments and the latter an attractive interest rate on stable assets.

Lenders connect their Terra Station wallet and deposit UST by paying a 1.60 UST transaction fee and earn the protocol’s 19.5% annual interest rate on a pro-rata basis for every block transaction (every eight seconds).

Borrowers bond their LUNA tokens and receive bLUNA (bonded LUNA) in return. They can borrow up to 60% of their deposited collateral in UST and pay an interest rate that is slightly higher than that paid to lenders. Bonded LUNA can be unbonded after 21 days. However, they also receive ANC tokens distributed by the protocol to incentivize its adoption.

Full Read Article: CLICK HERE