2021-07-07 06:52:15
Agora post on bolstering sustainability for Anchor is now live!
TFL will be capitalizing Anchor’s yield reserve with 50 million SDT (~70 million UST) from its Stability Reserve Fund.
As a lynchpin of the Terra ecosystem, capturing ~22% of UST’s outstanding supply, this enables sufficient time for the introduction of more collateral types and self-sustainable protocols improvements coming in the next couple weeks and in V2.
Assuming a 35% utilization (current) with a 35% average loan LTV, the reserve boost will enable Anchor to support a 20% APY of $500M worth of deposits for an additional period of around 1.5 years.
The deployment is a one-off solution that will prevent the need for future intervention, allocating a significant runway for the protocol to introduce self-sustainable mechanics even during periods of low borrowing demand.
Note that this replenishment is funded by TFL and causes no burden on the LUNA community fund. UST will be acquired via on-chain swaps, thus incurring no downward pressure on LUNA.
The planned upgrades to Anchor on the short-term horizon:
Introduction of bETH as collateral Yield farming bAsset vaults New liquidation mechanism (liquidation queue)
Increase bLUNA max LTV to 60% Other new collaterals: Following bETH, other PoS staking derivatives including bATOM, bSOL, and bDOT will be added as collateral to Anchor (estimates suggest that these Anchor can sustain $10B in deposits without relying on reserves in long term)
Algorithmic adjustment of long-term Anchor rates Diversification of yield sources For more details Agora thread: https://agora.terra.money/t/bolstering-anchors-sustainability/1516
Retweet: https://twitter.com/anchor_protocol/status/1412614294185943043
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