Thread by @mars_protocol

We get one question more than any other: what's the difference between @mars_protocol and @anchor_protocol?

Let's break down what they are and how they work.

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@anchor_protocol The tl;dr answer:

Mars = a decentralised banking protocol

Anchor = a Saving-as-a-Service (SaaS) protocol

The detailed answer:

As a savings protocol, Anchor has one overarching goal: making it incredibly easy to earn a fixed interest rate on deposits

As a decentralized bank, Mars' goal is enabling borrowing and lending of virtually any crypto that runs on Terra.

Anchor's interest rates are fixed. Mars' interest rates are volatile. That's because yields on the two platforms come from different places.

Anchor uses the most stable yield in crypto: PoS yield to help generate its fixed interest rates.

Because it only allows PoS assets as collateral for borrowing, it is less dependent on utilisation/demand for borrowing as it can use the PoS validator rewards to guarantee a given yield for depositors, even when borrow demand is low.

That is, Anchor takes deposits like $bLUNA and collects staking rewards from the Luna network, which is then shares with depositors.

Anchor describes this as a "risk-free rate" (like treasury bills in the real world).

Since PoS yields are stable and reliable, you can use them to as a way to enable high-yield savings account for depositors.

Mars' goal is to be a credit facility for the entire ecosystem.

As a result, we accept a far broader range of collateral to borrow against ($MIR, $ANC, $UST, etc).

Because these assets don't have fixed yields, Mars deposit rates are not stable but rather driven by demand for borrowing, both from borrowers, yield farmers and smart contracts.

Users will be able to deposit any crypto that runs on the Terra blockchain.

Then, other users can come and borrow that crypto (paying interest in the process).

The more demand there is to borrow a token, the higher the interest rate will be on Mars.

In banker terms, Mars is a true money market.

By allowing anyone, anywhere to deposit or withdraw whatever they’d like, it’s a great way to earn yield on your full crypto portfolio.

It also effectively enables sophisticated financial solutions like taking leveraged long or short positions on specific cryptos.

One could deposit $LUNA, for example, and use that collateral to borrow more $LUNA… in effect increasing or leveraging their exposure to the price of $LUNA.

Mars will also launch with liquidity mining, leveraged yield farming strategies (think $ALPHA on Terra) and uncollateralized lending across protocols.

Mars and Anchor don't compete.

They compliment one another, and we even expect some interesting mash-ups of functionality across the protocols.

We believe Mars and Anchor will be foundational building blocks for the future of Terra.

We share a mission and vision: to take crypto to the next 1 billion users, and we will do it together.