Anchor Protocol reserves are depleting
According to Terra.Engineer, reserves of Anchor (ANC), the flagship savings protocol of the Terra Luna (LUNA) ecosystem, have declined by 35.7% in the last seven days. Since the beginning of December, the amount of Terra USD Stablecoin (UST) held in the "terra1tmnqqgvg567ypvsvk6rwsga3srp7e3lg6u0elp8" smart contract has fallen by more than 50%, leaving just $35.7 million.
Whenever there is a shortfall between the income generated by borrowers' interest, collateral and income costs paid to depositors, Anchor must use the aforementioned TerraUSD (UST) reserves to make up the difference.
Last July, its creator, Terraform Labs, invested 70 million UST in the reserve protocol, and its value has been relatively stable. But in the last 60 days, total deposits have increased from $2.3 billion to $6.1 billion, and total loans have only increased from $1.2 billion to $1.5 billion.
