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Anchor Protocol (ANC)
A Lending and Borrowing Protocol on the Terra Blockchain.
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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.