Anchor Protocol

Anchor is a savings protocol built on the Terra blockchain. It offers a stable and attractive yield, powered by staking rewards from many Proof-of-Stake blockchains. The protocol is open and permissionless, meaning that apps may be freely connected to it.

There are five types of users on the Anchor Protocol network. The first one being lenders. These participants lend their Terra stablecoins into the Anchor money market. This pool of stablecoins may then be accessed by the borrowers. The deposited stablecoins gain interest, which is then distributed accordingly to the lenders. In conclusion, a pool of deposits generates loan interest, which defines the money market. To borrow from the pool, users leverage their digital assets as collateral. The interest rate is algorithmically determined based on asset supply and borrowing demand.

The job of liquidators is to look for and monitor loans with a loan-to-value ratio set above the maximum. If it's necessary, they may request for loan collateral to be liquidated. This is done by purchasing liquidated collateral in exchange for the liquidator's UST assets.

Anchor Liquidity Providers are users who provide liquidity to the Terraswap pair of ANC-UST. Since ANC tokens are distributed as borrower incentives, the exchange liquidity of ANC is very important.

Oracle Feeders are participants responsible for providing an accurate price feed for bonded asset collaterals. This data is then used for calculating the borrower's collateral value and as a reference price for liquidators.

The Anchor Token (ANC) is the governance token of the network. It is designed to capture a portion of Anchor's yield, which allows its value to scale linearly with Anchor's assets under management (AUM). Participants may opt to stake their ANC tokens and are incentivized to do so through staking rewards. ANC stakers can also make and vote for proposals which will benefit the protocol further. Whenever a proposal fails to pass, the ANC tokens that were used to vote on it, are redistributed as staking rewards. The ANC tokens have a fixed maximum supply of 1 billion.