Anchor Protocol - A Look Into The Savings dApp On Its First Birthday

Mar 21, 2022 • 10 Min Read
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Fellow Yield Farmers,

I hope the previous issues of DeFi Digest have laid some foundation in this fast-moving space that is Decentralized Finance. We’ve covered concepts such as money markets, decentralized exchanges, and yield sources/flows, teeing up this week’s analysis of Anchor Protocol nicely. Today also coincides with Anchor’s one-year anniversary of launching on Terra on March 17th, 2021.

For a recap of how UST algorithmically maintains its peg using LUNA, check out the previous issue of our crypto weekly.

Anchor Protocol is a decentralized fixed income platform that features compelling savings yields powered by an integrated money market and diversified staking yields. It launched with Earn, Borrow, and Bonding product functions - we explore the functionality of each below:

Bonding (bAsset)

Here, users can burn their Assets to mint bAssets, and vice versa. To reiterate, bLuna is the staked version of Luna, validating the network and earning staking rewards. Redemptions from bLuna to Luna, therefore, take 21 days to process and are still vulnerable to slashing risk.

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bAssets segregate the stakin...

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Ray: 425dc5-005329-7f05ab-210975-5fa7c4