Anchor Protocol (ANC)
A Lending and Borrowing Protocol on the Terra Blockchain.- Anchor Protocol is a lending and borrowing protocol on Terra blockchain. It allows users to lend, borrow, and earn interest with their digital assets with an over-collateralized model.
- ANC is the native token of the Anchor Protocol, with the following use cases:
- Protocol Fees: Protocol fees (10%) are used to purchase ANC tokens, which are then distributed as staking rewards to ANC stakers.
- Liquidity Mining: ANC rewards can be earned by staking LP tokens of the ANC-UST Terraswap pair.
- Borrowing Incentives: ANC is used as incentives to bootstrap borrow demand and initial deposit rate stability. The protocol distributes ANC tokens every block to stablecoin borrowers, proportional to the amount borrowed.
- Governance: ANC tokens can be staked to create new governance polls, which can be voted on by users that have staked ANC.
- Anchor Protocol consists of the following major components working in conjunction:
- Bonded Assets (bAssets): bAssets are liquid, tokenized representations of staked (bonded) assets in a PoS blockchain. They allow stakers to gain liquidity over their staked assets, enabling the locked value in staked assets to be utilized in financial applications such as Anchor.
- Money Market: Anchor's money market is a Compound-inspired lending protocol for lending out deposited Terra stablecoins to borrowers. Anchor sources its deposit yields from bAsset-collateralized loans, where rewards of their bAsset collaterals are utilized to subsidize the deposit rate.
- Loan Liquidation: Whenever a loan is liquidated, 1% of the liquidated collateral value is sent to the yield reserve, where a portion of which is used to purchase ANC.
- As at January 25th 2022, the maximum and total token supply of ANC is 1,000,000,000. The circulating supply is 213,493,245 (approximately 21.35% of the total token supply).
- Learn more about the token distribution of ANC here.