Anchor Protocol is built on the Terra blockchain and designed to generate passive income based on Terra stablecoins. This product pays investors a constant DeFi interest rate determined by the yield of the Proof-of-Stake blockchain with the highest demand.
The Anchor protocol is a fully decentralized fixed income tool. Let's look into the main aspects of its functioning. The APY rate that the protocol seeks to pay out to contributors is set by ANC token holders. They vote for the rate they think is fair. Under the hood of the project there is essentially a classic market, but with the difference that the collateral is reserved for liquid derivatives for staking on the main PoS protocols, so rewards are based on real assets. The actual income depends on the real PoS yield. If the real return is higher than the rate, then the excess one is held in reserve. If it is the other way around, then the profit is recovered from it.
Anchor Protocol can be divided into the following components:
Bond assets (bAssets) - tokenized representations of tied PoS assets (these can be bLUNA and bETH);
Money market which connects creditors and borrowers;
Liquidation agreement that controls the liquidation of credit positions with insufficient collateral.
ANC is the platform's native governance token that holders can use to create new governance polls for those who have staked ANC. Users who own the ANC token are paid for the protocol in proportion to their stake. Thus, it gives them an extra incentive.
Terra built an ecosystem of 3 protocols, one of which was Anchor. The launch of Anchor Protocol happened on March 17, 2021.
Terraform Labs was created in January, 2018 and its founders are from South Korea. Judging by how fast the platform is developing and how many features it provides, the developers are very talented and persistent.
In case you are interested in purchasing an ANC token, SimpleSwap will be happy to help you with it. To do this, simply follow the instructions below:
Now there is ANC in your wallet! If you are interested in learning about different cryptocurrencies with us, then stay tuned for SimpleSwap updates.