View profile

Earn 20% APY on Your Money With NO Effort- DAO Issue #20

Jacob Van
Jacob Van
This week we are exploring Anchor Protocol and how to earn 20% APY on your stable coins. Let’s jump in!

When the markets are bleeding and you are looking for stable returns in the crypto space where do you turn?
For a number of savvy investors, the answer is Anchor Protocol.
What Is Anchor Protocol?
Anchor is a savings protocol offering low-volatile yields on Terra stablecoin deposits.
Through the use of diversified staking yields, money markets, and the ANC token incentives and governance, the Anchor Protocol composes a fully decentralized fixed income instrument.
Let’s break that down a bit more.
Within the Anchor ecosystem there are four types of users:
  • Depositors (lenders)
  • Borrowers
  • Liquidators
  • ANC Liquidity Providers
Depositors are the user that lend Terra stablecoins to the Anchor money market.
The stablecoins are then pooled and lent out to borrowers, with the accured interest proportionally distributed to depositors.
Borrowers on Anchor are able to borrow liquidity and create loan positions.
These loan positions are required to keep a loan-to-value (LTV) ratio below the set maximum to avoid risky loans.
Liquidators monitor the platform for the existence of risky loans (as mentioned above) and request loan collaterals to be liquidated if the loan surpasses a LTV ratio above the set maxium.
ANC Liquidity Providers provide liquidity to the ANC-UST Terraswap pair.
These LPs handle the initial bootstrapping of the exchange liquidity between ANC tokens and UST.
All four types of users are required to enable Anchor to distribute a steady interest rate to depositors.
Anchor Token (ANC)
The Anchor Token (ANC) is the protocol’s governance token.
ANC tokens can be deposited in order to create new governance polls. These polls can be voted on by users that stake ANC.
The ANC token also plays a role in the lending and borrowing on Anchor. ANC acts as an incentive to bootstrap borrow demand and initial deposit rate stability.
ANC Value Flow
ANC Value Flow
There are a total of 1,000,000,000 ANC tokens to be distributed over a period of 4 years. Here is a breakdown of the distribution.
Final Token Distribution
Final Token Distribution
How To Earn
When you are ready to begin earning about 20% on your UST, the process is straightforward.
First, you will need to set up the Terra Staton browser extension wallet. I made a full tutorial video on how to do that.
LUNA To The Moon? 2022 Price Predictions + Tutorial
LUNA To The Moon? 2022 Price Predictions + Tutorial
Next, navigate to the Anchor Protocol Earn page and click the deposit button.
Enter the number of stable coins you would like to deposit and click “Proceed” to confirm.
Terra Station Extension should prompt you to sign a transaction that contains the deposit operation. Confirm the details presented and enter your password to sign.
That’s it! The deposit is complete.
You will complete the same process in reverse when you are ready to withdraw your stable coins.
There are no lockup periods on Anchor. You are able to withdraw your funds at any time.
What's The Catch?
20% APY may seem too good to be true. That rate is likely 100x higher than what your local bank’s savings account has to offer.
There is always risk involved when investing in a DeFi protocol. However, Anchor Protocol seems to be taking a calculated and well thought-out approach to savings.
With over $7 Billion UST locked in the protocol and over $4 Billion in collateral locked, Anchor has the treasury to support the 20% APY rate for the foreseeable future.
Anchor Dashboard
Anchor Dashboard
Anchor is one of the most popular savings protocols in DeFi at the moment. And for good reason. The project has built up a massive treasury of assets to support their distribution rate to depositors.
The 20% APY rate may not last forever, but why not take advantage of it while you can?
Thanks for reading and I will catch you next week!
Did you know I have a YouTube channel? Check out my latest video on Nike joining the Metaverse!
Nike is Joining The Metaverse. Here Is How You Can Profit.
Nike is Joining The Metaverse. Here Is How You Can Profit.
Did you enjoy this issue? Yes No
Jacob Van
Jacob Van @jacobavan_

Disciplined DeFi investing principles straight to your inbox every week.

In order to unsubscribe, click here.
If you were forwarded this newsletter and you like it, you can subscribe here.
Created with Revue by Twitter.