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Summary of Anchor Protocol
Key Points
- Anchor Protocol is a lending and borrowing protocol offering up to 19.5% yield on stablecoin deposits.
- Founders: Daniel Shin and Do Kwon from Terraform Labs, a South Korean fintech company.
- Terraform Labs raised $150m from major crypto investors.
- ANC is the protocol’s native governance token with a total supply of 1 billion and a current circulating supply of 222 million.
- Anchor is built on the Terra blockchain, using a delegated proof-of-stake consensus mechanism.
- ANC is available on Binance, OKX, Mandala Exchange, KuCoin, and Gate.io.
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Introducing Anchor Protocol: A Beacon of Stability in DeFi
Introducing Anchor Protocol (ANC): A Comprehensive Overview
Anchor Protocol is a pioneering lending and borrowing platform that offers a lucrative yield of up to 19.5% on stablecoin deposits. By depositing their UST, lenders can reap attractive returns on their investments while benefiting from the stability of low-volatility assets. Meanwhile, borrowers can unlock the value of their LUNA collateral, converting it into productive assets without relinquishing control.
By offering a high-yield, low-volatility investment opportunity, Anchor Protocol can effectively attract risk-averse investors, thereby driving up demand for UST and, by extension, fostering the widespread adoption of UST as a stablecoin. This, in turn, will propel the growth of the Terra project within the DeFi ecosystem. As Terra’s founders are also behind the launch of Anchor Protocol, the increasing adoption of Terra will, in turn, lead to a surge in the value of LUNA.
The Visionaries Behind Anchor Protocol: Meet the Founders
Anchor Protocol was established in March 2021 by Terraform Labs, a pioneering South Korean fintech company co-founded by visionary entrepreneurs Daniel Shin and Do Kwon. Notably, Terraform Labs is also the mastermind behind the Terra layer-one blockchain, which has been making waves in the DeFi space, boasting a staggering 17,000% surge in 2021.
Prior to founding Terraform Labs, Mr. Kwon held the position of CEO at Anyfi, a pioneering startup that specializes in decentralized wireless mesh networking solutions. Notably, he has also had stints as a software engineer at Microsoft and Apple. Meanwhile, Mr. Shin boasts an impressive entrepreneurial background, having co-founded Ticket Monster, a prominent South Korean e-commerce platform, as well as Fast Track Asia, a startup incubator dedicated to nurturing entrepreneurs and guiding them in building fully functional companies.
Terraform Labs stands as a behemoth in the cryptocurrency realm, having secured a staggering $150 million in funding from esteemed investors, including Arrington XRP Capital, Pantera Capital, Galaxy Digital, and BlockTower Capital, further solidifying its position as a trailblazer in the industry.
Unveiling the Unparalleled Attributes of Anchor Protocol
Anchor distinguishes itself from a plethora of other money market protocols, including Aave and Compound, courtesy of its sleek user interface and intuitive functionality. At its core, the protocol’s value proposition lies in facilitating seamless connections between borrowers and lenders, thereby enabling the former to borrow in stablecoin without relinquishing their investments, while offering the latter an attractive interest rate on stable assets.
What Is the Circulating Supply of Anchor Protocol (ANC) Coins?
The Anchor protocol’s native governance token, ANC, serves as a key to unlocking voting rights and shaping the platform’s future trajectory. With a total supply of 1 billion, the current circulating supply stands at 222 million. The ANC token distribution is allocated as follows:
- Tokens allocated to borrower incentives (40%)
- Investor allocation (20%)
- Team allocation (10%)
- Luna staking rewards distribution (10%)
- Community fund allocation (10%)
- ANC liquidity provision (5%)
- Airdrop distribution (5%)
Anchor does not provide any insight into vesting schedules. The ANC token surged to an all-time high of over $8 shortly after its inception, but has subsequently experienced a significant decline in value. Nevertheless, if the UST supply continues to expand, ANC may potentially revisit its trading range between $3 and $4.
The Anchor Protocol Network’s Robust Security Framework
Anchor is built on the Terra blockchain, a layer-1 blockchain that leverages a delegated proof-of-stake consensus mechanism, powered by Tendermint. Notably, LUNA token holders have the flexibility to either participate in securing the network by staking their tokens or delegate them to trusted validators.
Anchor has undergone a rigorous auditing process, with a total of three comprehensive assessments conducted by esteemed firms Cryptonics and Solidified, yielding a clean bill of health in terms of security. Furthermore, the protocol features a Bug Bounty Program, which incentivizes responsible disclosure with rewards ranging from $500 to a substantial $150,000.
The ANC token is dually listed, existing as a native CW-20 token on the Terra network and concurrently as an ERC-20 token on the Ethereum blockchain.
Where to Acquire Anchor Protocol (ANC): A Comprehensive Guide
Ancillary Coin (ANC) has successfully listed on prominent cryptocurrency exchanges, including Binance, OKX, Mandala Exchange, KuCoin, and Gate.io, further expanding its global reach.
For those seeking to delve into the world of cryptocurrency investment, CoinMarketCap Alexandria offers a wealth of information on getting started with buying cryptocurrencies.
Lenders seamlessly integrate their Terra Station wallet and deposit UST, facilitated by a nominal payment.
Benefit from a competitive 1.60 UST transaction fee and earn a lucrative 19.5% annual interest rate, allocated on a pro-rata basis for every block transaction, which occurs at an impressive frequency of every eight seconds.
Borrowers pledge their LUNA tokens and receive in return
bLUNA
(bonded LUNA) is offered in return. In this arrangement, users can borrow up to 60% of their deposited collateral in UST, albeit at a slightly higher interest rate than that offered to lenders. It is worth noting that bonded LUNA can be unbonded after a 21-day period. Furthermore, users also receive ANC tokens, which are distributed by the protocol as an incentive to promote its adoption.
The protocol leverages the revenue generated from the interest rate spread between borrowers and lenders to yield staking rewards on Terra, ranging from 5% to 7% per annum. The Anchor Yield Reserve serves as the protocol’s treasury, providing a financial safety net to cover expenses during periods of market volatility, as exemplified by Terraform Labs’ injection of 70 million UST into the Yield Reserve in summer 2021 to ensure protocol stability amidst the crypto market correction.
Associated Resources:
Discover Astroport (ASTRO), a cutting-edge decentralized exchange built on the Terra network.
Discover Mirror (MIR), a pioneering synthetic asset protocol built on Terra.
Discover the Fundamentals of Crypto Lending.
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