What Is Anchor Protocol and How Does It Work?
What is Anchor Protocol? Anchor Protocol is one of the earliest projects on the Terra blockchain that is dedicated to saving digital assets as well as lending and borrowing. The APY for saving crypto is up to 20%, which is one of the highest, especially when compared to traditional banks.
But people do not save on Anchor Protocol because of the APY alone; there are many other benefits that you get. For instance, you are allowed to use your deposits as collateral to borrow crypto coins for your needs such as business funding.
Are you curious to know more about what is Anchor Protocol? Keep reading.
How Does Anchor Protocol Work?
What is Anchor Protocol, and how does it work? Anchor Protocol provides a decentralized form of saving. So, there are no brokers in between to capitalize on your money; there is nobody to gain from your finances at your expense, which enables large payouts to the investors like you.
For you to start saving with Anchor Protocol, you need to open an account on the Terra blockchain. You can do this on their official website or through any third-party platform that lists Anchor Protocol. And you need to make a deposit in your Terra wallet too.
There are two sides to the Anchor Protocol dashboard according to the information shared on the Loop website: earning and borrowing. Just to explain, you earn a stable 20% APY on your savings, while you can also borrow against your savings. It is a simple platform to use. There is stability in earning ANC, the native token in Anchor Protocol. It has made a reputation for the platform.
What Is Anchor Protocol and How Many Anchor Protocol Coins (ANC) Are There?
If you are wondering “What is Anchor Protocol?” and other similar questions, you probably would like to know more about ANC coin circulation. There will eventually be 1 billion ANC coins in total, but the number in circulation today is 222 million coins. Hence, there are many more to be minted. The borrower incentive accounts for 40% of the total in circulation, and investors have taken 20%. Airdrops and rewards account for 15%. 10% is for community funding, while the rest is reserved for ANC liquidity.
The US dollar value of ANC is an average of $3, which is a good investment compared to other tokens. If you are planning to start staking in ANC, then you know what to do.
What Is Anchor Protocol and What Are the Benefits of Staking Anchor (ANC)?
There are many, and you can only understand them better when you interact with the Terra blockchain. Anyway, we will mention them here so that you fully understand “What is Anchor Protocol?” and why it is beneficial.
- Secure and stable savings – Although the cryptocurrency sector is volatile, the Terra blockchain assures stability by dealing with stablecoins. ANC is backed by such concepts although the token is independent. You are guaranteed digital asset security and stability while saving.
- Earn while saving – As mentioned, Anchor Protocol offers a stable return of 20% on your savings. This is very high compared to a traditional bank.
- You can borrow crypto – Borrowers take up to 60% of the total ANC in circulation. This is an indication that it is a working and popular project. Borrowers must have savings that will be used as collateral.
- Governance rights – Saving ANC on the platform gives you the right to vote and determine the future of the platform. As mentioned, it is a decentralized platform, and every member’s opinion is important.
Now that you know a lot about Anchor Protocol and can answer questions like “What is Anchor Protocol?” and others about the subject, you need to make a decision whether you want to invest here. Most investors are happy with the rewarding program.