- Retrograde announced that it is building the governance master key for Terra.
- The Anchor Protocol ($ANC) is bullish and provides an excellent entry point for investors.
- The Anchor Protocol has seen an increase in its market capitalization and value by 33.58% from February 24th to February 25th.
- With its value hovering at $3.40, $ANC offers a solid price point through which many cryptocurrency investors can enter its ecosystem.
Anchor is based on the Proof of Stake (PoS) consensus mechanism, where users are required to stake cryptocurrencies in order to validate blocks in the chain.
When validators choose to confirm or not confirm the validity of a block, they lose any staked coins, assuming they behave maliciously.
Anchor has two main elements. ‘bAssets‘ are a liquid version of the staked crypto. There is also the money market, which is a pool of stablecoin USTs. These are derived from people providing their capital for other users to borrow.
The rapid price increase of the Anchor Protocol ($ANC) has been one of the main reasons for its boost in popularity.
In terms of the performance of the token over the last week, it experienced a 7-day low on February 18th, at which point the token was at $2.04 in value. It then spiked in value to $3.54 on February 25th, marking an increase of $1.5, or 73.53%, and is now trading at $3.40 at the time of writing, representing a decrease of $0.14 or by just 3.95% since that 7-day high.
The seven-day price chart for Anchor Protocol ($ANC). Source: Coinmarketcap
Over the last 24 hours, the token jumped to a value of $3.54 on February 25th, 2022, immediately bouncing back from its minor dip to $2.65 on February 24th. This meant an increase in value of the Anchor Protocol ($ANC) token of 0.89, or 33.58% throughout the span of a single day.
The 24-hour price chart for Anchor Protocol ($ANC). Source: Coinmarketcap
On February 25th, 2022, Retrograde announced that it is working toward building the governance master key for Terra. Those who choose to engage in the project’s governance will be able to decide the fate of the Terra ecosystem.
The Anchor Protocol also broke into the top 100 token list on CoinMarketCap, becoming the 85th largest cryptocurrency in terms of market capitalization. Anchor also reached $11.8 billion in total value locked.
Recent days also played host to the Anchor Protocol’s AMA session, where they discussed $ANC vote-escrowed (ve) economics with special guests José Maria Macedo, retropong , atari7600, and tetrisretro from Retrograde, with danku_r acting as moderator.
The Luna Foundation Guard (LFG) nonprofit, which aims to scale the Terra blockchain ecosystem, also raised $1 billion through a private token sale.
The team behind the Anchor Protocol is aware that a 20% interest rate on UST isn’t sustainable in the long term and that it is likely that this interest rate will decline over time.
The issuance of $ANC tokens is also limited. It has a maximum supply of $1 billion which could potentially be reached as soon as 2024. This means that there are only a few years of incentives left for borrowers, whom the Anchor Protocol depends on for income.
Once $ANC rewards run out, it is crucial that the Anchor Protocol remains sustainable while offering an attractive interest rate on UST deposits.
The Anchor Protocol team is developing Anchor Protocol V2, which will aim to change the protocol in three significant ways. First, it will let borrowers keep all interest earned on any staked assets that they are used as collateral to borrow UST. Second, it will introduce staked $SOL on Solana, Staked $AVAX on Avalanche, and staked $ATOM on Cosmos as additional sources of collateral.
Finally, it will improve the project’s borrowing interface, enabling borrowers to see exactly how much UST they can borrow in dollar terms before being liquidated.
On the Flipside
- Aside from its value, The Anchor Token ($ANC) can be deposited as a means of creating new governance pools, which can then be voted on by users who have staked $ANC. It is designed to get a portion of all yields and, in turn, allows its value to scale linearly with Anchor’s assets under management (AUM).
The Twitter user @FynnToTheMoon wrote the following:
@TheRyanLion broke the news that $ANC broke into the top 100 cryptocurrencies by market cap:
Another Twitter user, @kale_abe, said the following:
Why You Should Care
The Anchor Protocol is one of the more promising projects to have risen to prominence recently, and has genuine potential for its future growth.