What is Anchor Protocol (ANC)? Everything you need to know about ANC

Terra ecosystem has evolved rapidly over the last months. The most recent event was a $150 million fundraising initiative in July 2021 to support DeFi development.

The topic of today's article will be a project with the highest Total Value Locked in the Terra ecosystem ($3.66b according to DefiLlama). This discussion will provide you with everything you need to know Anchor Protocol and the ANC token.

What is Anchor Protocol?

Anchor is a savings protocol that allows instant deposits and withdrawals, with the option to earn low volatility interest rates. The platform is supporting Luna and UST tokens to promote the development of the Terra ecosystem.

The project aims to become a money market between lenders and borrowers who are looking to use Terra stablecoin for different purposes. Lenders can earn stable yields from their stablecoins while borrowers are able to borrow stablecoins from stakeable assets. 

As an open and permissionless savings protocol, Anchor can be connected to any third-party applications to earn interest on the platform. Developers can interact with Anchor to connect their applications without any complicated coding requirements.

How does it work?

The Anchor Protocol consists of these main components:

Bonded Assets (bAssets): bAssets are liquid tokens that can be used to exchange for staked assets. They provide holders of PoS blockchain-backed cryptocurrencies like Anchor an opportunity to earn income by enabling them to access the locked value stored in their positions on this particular tokenized fund.

Money Market: Anchor's money market is a Compound-inspired lending protocol for lending out deposited Terra stablecoins to borrowers. They use their deposits made from bAsset collaterals as collateral with higher interest rates and offer special subsidies on those funds which allow them to make more loans at lower rates.

Loan Liquidation: To prevent defaults from borrowers, Terra rewards liquidators and liquidates loans that are above the allowed maximum. The project uses Liquidation Contract to convert collaterals of liquidating loans to stablecoins on Terra to repay the loan. Liquidation Contract also acts as an OTC exchange between collateral tokens and Terra stablecoins.

These activities promote the development of the Terra ecosystem by mainly focusing on the LUNA token and its stablecoin. Users can deposit the Terra stablecoin (UST) to earn stable yields or use collateral assets on the platform to borrow other assets with 50% of the value.

From 14th August, 2021, the project also supported bETH as a bonded asset. After only one day, the total collateral value of bETH already reached $100M.

What is ANC token?

Anchor Token (ANC) is the native token of the Anchor Protocol. The token has many use cases within the protocol to support these activities:

• Governance: Handles Anchor Governance and reward distribution to ANC stakers
• Staking: Handles ANC-UST pair LP token staking
• Community: Manages ANC community grants
• Collector: Accumulates protocol fees, converts them to ANC and distributes to ANC stakers
• Distributor: Holds ANC tokens which will be used as borrower incentives

Detailed information about ANC Token

ANC Token Metrics

• Token Name: ANC Token.
• Ticker: ANC.
• Blockchain: Terra
• Token Standard: Updating...
• Contract: terra14z56l0fp2lsf86zy3hty2z47ezkhnthtr9yq76
• Token Type: Utility, Governance.
• Total Supply: 1,000,000,000 ANC.
• Circulating Supply: 119,482,043 ANC.

ANC Token Allocation

• Borrower Incentives: 40%
• Investors: 20%
• LUNA Staking Reward & Airdrop: 15%
• Team: 10%
• Community Fund: 10%
• ANC LP: 5%

ANC Token Sale & Release Schedule

The ANC token was offered in pre-sale at $0.1 per ANC during 17th March 17th - March 20th, 2021.

Investors’ distribution is locked in 6 months and will be released after a year. 

The team also distributed ANC tokens at the end of each year for a total of 4 years.

How to buy ANC token

You can buy ANC on these exchanges. More information can be found here.

How to mine ANC token

Users can perform these activities to earn ANC tokens:

• Stake LUNA and receive ANC tokens as rewards.
• Provide liquidity to the ANC/UST pair.
• Deposit UST to Anchor Protocol and earn stable yields in ANC tokens.

How to store ANC token

You can store ANC on Terra Station by creating a wallet ⇒ deposit ANC tokens into your wallet.

Roadmaps and Updates

Updating

Team, Investors, and Partners

Team

The project is supported by Terra Labs.

Terra Labs is founded by Do Kwon, founder of Terra. He graduated from Stanford University and was listed in Forbes 30 under 30 leaders in the Finance and Ventures Capital category.

Investors

Anchor Protocol has raised a total of $20M from the Venture - Series Unknown on March 17th, 2021. The project is funded by 8 investors including Alameda Research and Hashed.

Partners

Anchor announced the partnership with Lido, showcased the launch of bETH on the platform. This partnership will grant users on these platforms new opportunities such as collateralized lending, anchor mining rewards and improve Anchor TVL in the long term.

Is ANC a good investment?

This article has provided some of the main ideas related to the ANC token and its implications. Still, it is important to note that there are a few key points that investors should take into account before making investment decisions:

• The money market is one of the key players in the Terra ecosystem and it has exploded in popularity this year. It is one of the reasons why UST is ranked 5th on Coingecko by market capitalization. The working model of Anchor promotes the usage of stablecoin on Terra and also the development of the whole Terra ecosystem.

• The Total Value Locked of Anchor Protocol is ranked 1 in the Terra ecosystem. Considering the project only started in March, 2021, it has gained a huge user adoption when the total value locked reached $3B after only 5 months, which we don’t normally see in any projects from other ecosystems.

• The partnership with Lido and the launch of the new bonded assets (bETH) will open up users with new opportunities to earn stable yields on the platforms. With more layer-1 blockchain projects growing recently, we can expect more supported bonded assets on Anchor Protocol.

Conclusion

I hope you have gained all of the important information about ANC including its features and highlights throughout this topic.

If you have any questions about ANC or want to know more about ANC, please feel free to leave a comment below and join Coin98 Community for further discussions about Crypto.