Thread by @RCryptoGuy1

First writeup! 1/ Anchor Protocol is newest member to Terra ecosystem. $ANC is providing 20% APY providing a benchmark rate for Defi. It does this by pooling staking emissions and trx fees from major PoS chains Borrower collateral (staking derivatives) generate

2/ rewards and then are stabilized to provide the 20% interest rate. Any excess yield is put into a yield reserve which helps support the target rate should supply/demand volatility increase.

3/ $ANC is becoming/striving to first/best savings product in Defi. Benefits driving people to $ANC is ease of use, stable high interest rate (when compared to banks) and unlocks liquidity for PoS stakers. Anchor is the third and final pillar in Terraform Lab's trifecta: savings,

4/ payments and investing). $ANC tethers it's 20% interest rate to the inflation, cashflow and macro connection to PoS chains in the market.

5/ Demand side: UST Depositors (UST acquired through an exchange like KuCoin and transferred to your Terra Station wallet). Then users can go to app.anchorprotocol.com/earn and deposit their UST with the "Deposit" button and immediately start accruing 20% APY. IT IS THAT SIMPLE.

6/ The simplicity is amazing and as adoption continues why would anyone keep fiat in savings earning less than a percent when they can easily deposit and withdraw and earn 20%.. $ANC token reward incentives will change based on market conditions as well (see med article at end)

7/ If the market prices go down $ANC will remain steady at 20%APY. This is driven by demand for UST in volatile times in theory. When market price goes down sell offs of $LUNA should be decreased due to increased demand for UST which $LUNA is needed to be burned to create.

8/ Borrowers on the supply-side of Anchor lock-up bLUNA in return for UST debt. The ratio for bLUNA will be between 150-200% and can be changed via governance. bLUNA tokens are minted by delegating $LUNA via the bLUNA contract. Users need to specify a validator to delegate the

9/ minting of bLUNA. bLUNA holders can redeem for underlying bonded Luna by 1) requesting to unbond and 2) withdrawing undelegated $LUNA. More detail on these two things in anchor protocol docs link at end of thread. bLUNA tokens accrue TerraUSD (UST) rewards.

10/ Rewards are generated from the underlying Luna Delegations . At the time of this writing borrowers are earning around 325%! Please see a great thread on this by @Bitcoin_Sage

https://twitter.com/Bitcoin_Sage/status/1372588138988769280

11/ Final Thoughts: With the recent rise of $LUNA it is no doubt that the Terra ecosystem is catching on. The 3 pillars of Terraform Lab's will continue to grow as the synergy within the ecosystem is amazing. Borrowers can earn crazy high returns, but they should be conservative

12/ on their TVL and monitor fluctuations to ensure they don't get liquidated. As for the Depositors of $ANC a fixed return of 20% is nothing I have heard of or even would imagine would be possible. As a seeming large player and first mover in the Defi Savings niche I could see

13/ this being much larger than it's current $342M MC. I plan do play around with both $ANC and Terra Station some more in the next few days and will leave by thoughts/findings in another post. From the looks of both UI's it will I may get hooked in the Terra ecosystem

14/ Credits/Links:
medium.com/anchor-protoco…
docs.anchorprotocol.com/protocol/bonde…
@Bitcoin_Sage @ReliableNarr @anchor_protocol @terra_money #terra #anchorprotocol @hackapreneur