On Thursday, the team behind the Lending Protocol Anchor announced that the proposal was passed and that the decentralized money market “implements a more sustainable semi-dynamic rate of return.” After the announcement, the value of the protocol’s native token ANC has dropped by about 2% in the last 24 hours.
Anchor protocol is changing application acquisition rates
Anchor Protocol, a decentralized finance (defi) money market and lending application built on Terra, has made some changes to its rate of return. According to a recently passed governance vote, the anchor protocol dynamically adjusts payment rates.
The rate of return can increase or decrease over time, up to 1.5% spent on increasing or decreasing yield reserves. The results of the Anchor Governance Vote show that 14.98% voted “yes” to the proposal and 2.4% voted “no”.
In addition, Anchor’s official Twitter account Tweet About the proposal to pass on Thursday. “With the passage of Proposal 20, anchors will implement a more sustainable semi-dynamic rate of return,” the team explained in detail. The anchor team added:
In its simplest form, this proposal contains two parameters on the revenue side, each categorized. 1. Frequency – How often the rate changes. [and] 2. Maximum rate adjustment – the magnitude of the rate change.
According to the thread, the protocol payment rate is adjusted once a month and the adjustment is based on the performance of the yield reserve for that month. “Since the upper limit of rate adjustment is set to 1.5%, the maximum value that can be increased or decreased each month is 1.5%,” details of the anchor’s Twitter thread. “Interest rate adjustments can be positive or negative, depending on whether the yield reserve has risen or fallen that month.”
Anchor recently added cross-chain support at Avalanche, and Anchor’s locked value surged 44.59% in 30 days.
Anchor’s project announcement continued, adding that if a change of less than 1.5% occurs, the rate of return will be adjusted equally. The news continues in the direction between the anchor’s first anniversary and the protocol chain.Anchor Executive Ryan Park announcement On March 17th, Anchor began supporting Avalanche (AVAX) via Xanchor (Cross Anchor), an “extension of the Anchor Protocol”.
“along [Anchor Protocol’s] On his first birthday, Anchor took the first step towards interchain, “said Park. “Xanchor with wormholes brings Anchor functionality to other non-Terra blockchains. Start with an avalanche. Xanchor is unique in its seamless cross-chain UX – most users care about it. Focus on the facts [about] Which chain the app is on, not on which chain. Using Metamask only allows users to work directly with anchor contracts. [Terra].. No expansion of the Terra wallet is required, “added Anchor executives.
Terra is currently leading the second largest decentralized finance (defi) total value lock (TVL), partly because of the anchor protocol. Terra’s TVL is $ 26.97 billion, while Anchor accounts for a total of $ 14.4 billion, or 53.39%. Anchor protocol TVL has increased by 44.59% over the last 30 days, and most recently, Anchor has surpassed Aave as one of the largest lending applications in today’s ecosystem.
Anchor’s recent announcement follows the purchase of the Luna Foundation’s Bitcoin (BTC). The Luna Foundation leverages BTC to support the stability of Terra’s stablecoin UST. Anchor’s team believes that restructuring the rate of return will sustain the project in the long run.
“The addition of semi-dynamic acquisition rates contributes to the long-term sustainability of anchors, allowing protocol users to increase yield reserves while continuing to provide attractive yields to UST. It will bring benefits, “concludes the announcement of the Anchor Protocol.
What do you think about the anchor protocol turning into a semi-dynamic rate of return? Please tell us what you think about this subject in the comments section below.
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