Anchor Protocol"s Earn Rate Adjusts for the First Time, From 19.4 to 18% APY
Following the governance vote that aimed to implement a semi-dynamic earn rate for the Anchor Protocol, the decentralized finance (defi) platform’s earn rate adjusted downward for the first time this month. After holding steady with a 19.4% annual percentage yield (APY) since the project started, Anchor Protocol’s earn rate is now roughly 18% APY for the month of May. Defi Lending Protocol Anchor’s Earn Rate Adjusts Downward
The lending platform Anchor Protocol is the third-largest defi protocol today with $16.5 billion total value locked (TVL). Statistics show that during the last 30 days, Anchor’s TVL has increased 9.25% since last month.
Around 45 days ago, the team behind the lending protocol announcedthat a proposal had passed and the decentralized money market would have a fluctuating earn rate. Before the proposal, Anchor users who deposited terrausd (UST) would get a steady 19.4% APY earn rate on their UST deposits every month. Anchor Protocol’s current APY stats.
Since the governance vote passed, the first semi-dynamic adjustment took place at the start of May, and depositors today are getting roughly around 18% APY. Since the change took place, the earn rate can increase or decrease per period to 1.5% depending on the increase and decreases in yield reserves.
With the current 18% APY, the change means this month, depositors will be getting less than they used to get prior to the adjustment change. Furthermore, in June the earn rate could very well change again depending on the protocol’s yield reserves.
Anchor Protocol now supports two blockchains, as Avalanche support was recently implemented. While $16.27 billion stems from Terra-based tokens, $202.48 million worth of Anchor’s TVL is comprised of Avalanche-based tokens. Currently, there’s $2.9 billion that’s been borrowed from the Anchor Protocol in defi loans.
The Anchor earn rate fluctuation follows the recent defi forex reserve purchasesmade by the Luna Foundation Guard (LFG). The non-profit organization based in Singapore leverages the reserves to back terrausd (UST) and LFG holds 80,394 BTC worth $2.89 billion and $100 million in AVAX.
With Anchor Protocol changing its incentives to a semi-dynamic earn rate, it will be interesting to see if it affects the platform’s TVL, which has seen growth month after month. During the past 24 hours, Anchor’s TVL has dropped by 2.89% and this week it’s dipped by 0.66% in the past seven days. Tags in this story Algorithmic stablecoin, Anchor, anchor protocol, Anchor’s TVL, Annual Percentage Yield, APY, Avalanche support, DeFi, defi lending, defi platform, earn rate, earn rate change, Luna Foundation Gaurd (LFG), protocol’s yield reserves, semi-dynamic earn rate, Stablecoins, Terra, TerraUSD, total value locked, TVL, UST, UST deposits
What do you think about the Anchor Protocol’s earn rate adjusting? Do you think it will affect the defi protocol’s popularity? Let us know what you think about this subject in the comments section below. Jamie Redman
Jamie Redman is the News Lead at Bitcoin.com News and a financial tech journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open-source code, and decentralized applications. Since September 2015, Redman has written more than 5,000 articles for Bitcoin.com News about the disruptive protocols emerging today. Value Locked in Defi Drops Below $200 Billion, April"s Dex Trade Volume Drops 21% Lower Than March DEFI | 6 days ago Report: $1.3 Billion in Crypto Stolen in Q1 2022, 97% Stemmed From Defi Exploits DEFI | Apr 28, 2022
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