Thread by @dopeboyshanee

Heard concerns about how Anchor will sustain ~20% yield during a bear market and whether yield reserve will deplete. A quick 🧵

$ANC $LUNA

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1/ First of all, the promise of Anchor is in the stabilized stable yield, not in the 20% itself.

The aim is to become the benchmark rate of Defi, and it doesn't necessarily have to be 20%.

2/ The long-term anchor rates can be algorithmically adjusted (currently static, set by gov), reflecting current market/protocol conditions, updating every long term period, like 6 months

3/ Underutilized UST in anchor could be deployed in safe yield generating capital markets like low IL pools, delta neutral strategies on @mirror_protocol, and so on, creating additional revenue for the protocol

4/ Vaults like @NexusProtocol and @neptune_finance (launch TBA) could boost borrower activity as they have built-in liquidation protection.

5/ New liquidation mechanism @TeamKujira, lowers liquidation premiums, reducing damage to borrowers in events of liquidations.

6/ Diversified collateral options like bSol, bDot, and bAtom incoming.

Increase of bluna apy(now >10%)

7/ TFL has deep pockets and could fund yield reserve as a last resort.

However, I think it won't be necessary considering the above points

Some good reads 👇

[Overview by @dareal_sisyphe ](

https://twitter.com/dareal_sisyphe/status/1463536308769468420?s=20

)

[Health check @cptn3m0x ](medium.com/@cptn3m0x/6-mo…)

[Anchor thread by @stablekwon ](

https://twitter.com/stablekwon/status/1371371963046797312?s=20

)

[Anchor thread by @Route2FI ](

https://twitter.com/Route2FI/status/1442835869879181312?s=20

)