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There's absolutely no doubt that Anchor Protocol has been one of the top conversation in the Terra community most especially when we consider it's stable coin known as Anchor UST (aUST). I'm quite sure we all agree that the Terra ecosystem is really expanding more than we can ever imagine and this effect can be observed on the price or value of Terra (LUNA) as the native coin was able to attain a new all time high worth more than $100 for the past few weeks.
Today's content will be mainly focused on Anchor UST (aUST). I'll also be sharing how you can earn 20% fixed interest on UST using Anchor Protocol. I'm definitely optimistic that you will find this content helpful. Before I let the cat out of the bag, I think it's best we do some little review about Anchor Protocol itself and how it works as this will enable you to understand the usefulness and relevance of Anchor UST (aUST).
What is Anchor Protocol ?
Anchor is an open, permissionless savings protocol, meaning that any third-party application is free to connect and earn interest without restrictions. Anchor also has it's native token known as ANC which can be used for governance, staking, saving and lending activities. The native token (ANC) now worths more than $2 today with a total supply of 1,000,000,000 ANC tokens.
I could also remember publishing a content last year about brief review on some terra projects analysing them using data generated from flipsidecrypto.
You can find the link of this post at the end of this article. One of the data i generated from Flipsidecrypto can be observed in the screenshot below as it shows that we have more users utilizing Anchor Protocol for lending and borrowing almost every single day which is a sign of good development on Terra ecosystem.
Understanding Some Basic Terminologies Used in Anchor Protocol
In this part I'll be explaining some basic terminologies being used in Anchor Protocol even though I hope to explain nearly all of them but time won't permit me to do that today and I don't want the post to look so bulky or lengthy such that you get scared or overwhelmed reading the content completely. I will be selecting some of the major key terms utilized in Anchor Protocol and I'll make brief explanation for proper understanding.
#1 LENDER
According to investopedia, a lender can be an individual, a public or private group, or a financial institution that makes funds available to a person or business with the expectation that the funds will be repaid. Repayment may include the payment of any interest or fees.
This concept also applies to Anchor protocol. In Anchor protocol lenders are known as depositors and they are known for lending Terra stablecoins to the Anchor money market. The deposited stablecoins are pooled and lent out to borrowers, with accrued interest pro-rata distributed to all lenders or depositors.
#2 BORROWER
In a layman definition, we can define borrower as someone who collects an entity or item from a lender with the intention of returning it back to the lender.
When it comes to Anchor Protocol, it's quite a bit different case here. Borrowers are known as people who create bAsset-collateralized loan positions to borrow Terra stablecoins from the Anchor money market released by the lenders.
Borrowers also have access to liquidity without losing price exposure to their bAsset collateral. Borrowers are also recommended to keep a close eye on their loan position's Loan To Value ratio, as loans with Loan To Value ratios greater than the set maximum value are subjected to liquidation.
The good news is that Anchor protocol (ANC) tokens are also rewarded to borrowers as a means of incentives to reward the borrowers just like the way the lenders are also rewarded.
#3 ORACLE FEEDER
An Oracle Feeder is a Terra account that is responsible for providing an accurate and up-to-date price feed for bAsset collaterals. Fed-in price data is used to calculate the collateral value of a borrower, also used as the reference price in the Liquidation Contract.
#4 ANCHOR STABLECOIN (aUST)
Stablecoins are digital currencies which are mostly backed by assets known as fiat currencies. They are also designed to be pegged to either cryptocurrency, fiat currency or fiat money and sometimes exchange native coins.
Anchor UST (aUST) is another stable coin built on the Terra blockchain system. It is currently worth 1.175 terra UST with a total locked value of 10,990,111,720 UST. Anchor UST can be used during token swap on Anchor protocol making it easy to buy or swap tokens easily on the platform. Anchor UST
Another great advantage is that users are able to stake and earn more aUST tokens using Anchor Protocol. I'm quite sure you may be wondering how this is possible, i will be sharing how you can earn 20% ROI just by saving your UST using Anchor Protocol with your mobile phone.
Steps Required to Earn 20% ROI on Anchor Protocol
- Visit www.anchorprotocol.com on your browser. I suggest you make use of Google chrome browser or brave browser for easy user experience.
- The next step is to click on Webapp as shown in the screenshot. After clicking on the webApp you'll be redirected to a new interface which enables you to interact with Anchor Protocol.
- Connect your wallet with Terra Station and ensure you've already set up your Terra Station wallet.
- Deposit the amount of UST you want to save on Anchor and start earning 20% ROI. This can be achieved if you already have UST on your Terra Station wallet which makes it more easier for you to deposit directly into your Anchor account.
- Sign the transaction and you are good to go.
- Finally and there you go
Reference Links
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