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  • Matteo Poole

Anchor Protocol - ANC

Updated: Jun 21

Market Discovery of the most influential markets in the cryptocurrency world.

Anchor Protocol ANC market

What is Anchor Protocol (ANC) and how does it work?

Anchor protocol (ANC) is an open, permissionless, decentralized savings protocol offering low-volatile yields on Terra stablecoin deposits. The lending and borrowing protocol offers up to 19.5% (Anchor protocol apy) yield on stablecoin deposits. Lenders can deposit UST (Terra's stablecoin), other stable coins such as USDT, and cryptocurrencies, such as Luna, and earn attractive rates on their investments while simultaneously benefiting from low volatility, without giving up the control of their assets.

Anchor protocol crypto rate is powered by a diversified stream of staking rewards from major proof-of-stake blockchains and therefore can be expected to be much more stable than traditional money market interest rates, due to the nature of crypto stacking. Its community believes Anchor could become the reference interest rate in crypto.

Due to the fact that Anchor is an open, permissionless savings protocol, any third-party applications can easily connect and earn interest without restrictions, meaning that through Anchor Earn, Anchor.js or EthAnchor, developers can interact with Anchor using just a few lines of code, and create their own crypto earning platform.

Anchor protocol works by defining a money market between a lender, looking to earn stable yields on their crypto or stablecoins, and a borrower, looking to borrow stablecoins on stakeable assets. To borrow stablecoins, the borrower locks up Bonded Assets (bAssets) as collateral and borrows stablecoins below the protocol-defined borrowing ratio. The diversified stream of staking rewards accruing to the global pool of collateral then gets converted to stablecoin and then conferred to the lender in the form of a stable yield.

Anchor aims to provide depositors with:

  • High, stable deposit yields powered by rewards of bAsset collaterals

  • Instant withdrawals through pooled lending of stablecoin deposits

  • Principal protection via liquidation of loans in risk of under collateralization

Therefore, the Anchor protocol can attract risk-averse investors looking for high-yield, low-volatility investments and increase demand for UST as a consequence. This increases the adoption of UST, terra and other stablecoins, as well as increasing the amount of the coins held in wallets (soft locked) due to the UST apy system. As a consequence, this increases the adoption of Terra, and other DeFi projects, as well as the price of Luna, whose founders are behind the launch of Anchor Protocol.

Anchor is the latest popular platform based on the growing Terra ecosystem, that host many other solutions for traders and investors, such as Mirror Protocol, a platform to trade traditional assets such as stocks, without the need of a financial intermediary and using crypto as collateral, and Terra station a web extension that allows users to access decentralized applications (DApps) powered by smart contracts on the Terra blockchain.


Coin Analysis

Last update 15/3/2022

Anchor protocol coin (ANC) originally launched in March 2021 on exchanges such as Kucoin and saw a fast increase in price over the first week of trading, but only later got listed in bigger more mainstream exchanges such as Binance.

ANC originally started trading at $3, before rising exponentially to over $8. This of course did not last, and a few days later prices fell below $4. For a few weeks following the initial move, prices seemed to stabilize over the $4.4 support level, in what was a really bullish period for the crypto market as a whole. However, this level did not seem to hold, and by August 2021, prices fell sharply below this level, reaching a new low of $1.70. This level also didn't hold, and within a few days, prices were back above the $2.70 support level.

ANC/USDT weekly candles chart
ANC/USDT weekly candles chart

In the following months, we saw prices bounce between the resistance level of $4.40 and the support level of $2.70, making high lows and low highs, whilst deciding what direction to take. Ever since, prices dipped back to the $1.70 level, just to shoot back up and go as high as $6. This level did not hold and the weekly candle closed back below the $4.40 level, signalling how it's still a really strong and significant resistance level.

The price prediction for Anchor is still really unclear, as over the last few months we saw a lot of sideways movement and no directional change. It would seem that the more likely scenario for ANC is still some lateralizing, before moving in either direction. However, it can't be excluded that if prices break above the $4.40 level, we might see a push towards the next resistance level of $6.60. The same can be said for the opposite direction, where if prices fail to hold above the $2.70 support, we might see another bounce over the $1.70 level.

ANC is available for trading on dApp.

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Anchor Protocol token coinmarketcap

Anchor Protocol website