Decentralized Finance (DeFi) is evolving beyond the speculative use cases and primitive money legos. Anchor Protocol appears to be the next logical evolution in a long list of money protocols, which fit together to create a powerful and censorship-resistant alternative to traditional finance. It offers stable yields and savings. Let’s take a look!
By nature, the current yields in DeFi are volatile and generally unsustainable. This needs to change, if DeFi ever has to go mainstream. Large institutions and average families rely on stable yields and savings. Anchor Protocol is a decentralized money market and savings protocol working to achieve that.
Anchor Protocol is attempting to offer stable yields denominated in dollar stablecoins by utilizing Terra’s UST, which are composable in other DeFi protocols. It went live on Mar 17 link. If successful, it might be the first major gateway popularizing and making DeFi useful for the mainstream.
What Does Anchor Protocol Offer?
Enough with the introduction, what does this protocol do? In particular, it offers stable 20% APY interest, but accepts only liquid staking derivatives as posted collateral. For example, it relies on cash-flow generating staked POS assets from major chains. Here’s what else it does.
Anchor Protocol allows users to deposit UST to earn UST, receive Anchor Protocol (ANC) airdrops through LUNA staking, borrow UST to farm ANC or provide it’s liquidity and buy ANC to speculate. It would create a DeFi reference interest rate, much like the S&P 500 benchmark.
In addition, the staking derivatives (called bAssets with tokenized ownership and claim over POS rewards plus tx fees) powered protocol would usher in a new era of responsible investing, without engaging in the so-called degenerate (degen) behavior. Best part? The process is one-click and extremely simple.
How To Stake UST?
Now that you know the basics, how should you start your journey with the Anchor Protocol? It’s simple. Open the DApp here and access the main page. Select the amount to deposit and confirm the transaction. Your money will be staked and generating passive income for you in no time!
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