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Difference between revisions of "Anchor"
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== Overview == | == Overview == | ||
Anchor protocol | Anchor protocol, as do all money markets, offers lending and over-collateralized borrowing of crypto assets. It uses a selection of assets that can be used as collateral and only allows borrowers to take out UST loans. | ||
=== | ===Collaterals=== | ||
Anchor protocols uses only bondend PoS cryptocurrencies as collateral. Whenever a user wants to provide collateral for a loan, he has to bond the crypto asset (ex. LUNA bonded into bLUNA, ETH bonded into bETH). Through bonding, the user gives up the staking interest of that coin which go to the Anchor protocol for it to pay UST lenders. | |||
Once the assets are bonded and deposited into the platform, UST borrowing is allowed. | |||
Borrowers pay a variable interest to lenders and are incentivised through ANC emissions thus making borrowing on the Anchor protocol quite cheap. | |||
=== | ===UST lending=== | ||
Anchor | Anchor protocol has gained traction among DeFi users thanks to the high interest (up to 19.5%) paid to UST depositors. This high interest is sustained by: | ||
# The interest paid by the borrowers | |||
# The staking yield of the collateral deposited | |||
# The yield reserve | |||
Recently the Anchor governance has approved a proposal which will make UST interest dynamic instead of fixed, depending on the yield reserve status. | |||
=== Loan Liquidation === | === Loan Liquidation === | ||
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== The ANC token == | == The ANC token == | ||
The Anchor Token (ANC) is Anchor's Protocol's governance token. ANC tokens can be deposited to create new governance polls, which can be voted on by users that have staked a minimum of 1000 ANC.<ref>https://docs.anchorprotocol.com/protocol/anchor-token-anc</ref> | The Anchor Token (ANC) is Anchor's Protocol's governance token. ANC tokens can be deposited to create new governance polls, which can be voted on by users that have staked a minimum of 1000 ANC.<ref>https://docs.anchorprotocol.com/protocol/anchor-token-anc</ref> | ||
== The Yield Reserve == | |||
The yield reserve is controlled by the Luna Foundation and it allows the Anchor Protocol to pay a stable yield to UST deposits. It is designed to shrink during times of contraction and to grow during times of expansion, when there is more PoS collateral generating yield and more interest is paid by the borrowers. | |||
== Sources == | == Sources == | ||
[[Category:Protocols]] | [[Category:Protocols]] | ||