Terraform Labs introduces Anchor, a low volatility, high yield savings protocol for the Terra blockchain »CryptoNinjas

Terraform Labs (TFL), the company behind the Terra blockchain network, today officially released the network’s new savings protocol, Anchor.

Anchor is a cross-chain DeFi application that bundles the emission of PoS blockchains, stabilizes them and passes them on to depositors as a fixed, high-yield interest.

“Stable and attractive dollar-denominated returns that can be aggregated into smart contracts are the holy grail of cryptocurrency,” said Do Kwon, co-founder and CEO of Terra. “Anchor’s attractive returns for TerraUSD will move millions of households to transfer their savings to Anchor’s smart contracts, taking DeFi from the edge to the mainstream.”

anchor

At a high level, Anchor acts as a decentralized money market in the Terra network that only accepts liquid staking derivatives as security on the supply side.

On the demand side, Anchor users deposit UST, one of Terra’s suite of fiat pegged stablecoins, on the Anchor web app and receive stable rates with a low volatility return that includes a tight band around 20% APY.

Anchor’s launch partner, Crypto Exchange CoinList, has also integrated Anchor and enables CoinList users to deposit UST directly into Anchor without leaving the exchange’s interface.

“We evaluated a number of products that CoinList users can use to earn interest on their deposits. both centralized and decentralized, ”says Mike Zajko, Head of Token Sales at CoinList. “In the Anchor Savings Protocol, we have discovered one of the most elegant crypto-native solutions for low-risk stable income and are pleased to be a starting partner.”

On the supply side, liquid staking derivatives enable tied network tokens (e.g. SOL) to be activated by the staker in the consensus model of a PoS blockchain and used as a derivative that has a claim to the cash flows of the staked position via various DeFi Apps represents.

With Anchor, borrowers block collateral (stake derivatives) with a minimum collateral ratio of 150 – 200%, depending on the underlying collateral used. Borrowers then receive aUST, Anchor’s stablecoin, as debt for their locked collateral.

The first liquid stakeout derivatives that can serve as security for Anchor are bLUNA, a stakeout derivative of Terra’s native LUNA token. The implementation of bLUNA is led by LIDO Finance – the same DAO as the ETH 2.0 derivative for liquid staking out.

BLUNA’s collateral ratio will initially be 200%, and several other stakeout derivatives from major PoS chains such as Polkadot (DOT), Solana (SOL), Ethereum 2.0 (ETH) and Cosmos (ATOM) will follow shortly.

ANC token

Anchor is controlled by the protocol’s native token, ANC, which captures a portion of Anchor’s revenue and uses the generated revenue to buy back ANC on TerraSwap and distribute it to ANC stakers. The value recording of the token is scaled linearly with the TVL of Anchor.

Anchor can be integrated into exchanges, crypto wallets and fintech platforms via the Anchor API and SDK. This opens up savings for the masses on fixed income securities that result from DeFi’s compositional ability.