Anchor Protocol | Earn 20% interest
Anchor Protocol It is a decentralized finance protocol belonging to the Terra blockchain, with which we will be able to request loans in various currencies, make staking or earn up to one approximate rate of 20% per year with the Terra UST stable coin.
Undoubtedly, the interest generated is one of the reasons why this protocol has achieved such enormous popularity, since right now there are few sites that offer us such good and sustained returns over time for leaving our stable coins deposited.
The Terra network has lost all its value and with it has dragged down UST, it is not recommended to invest in this protocol at this time.
The protocol is one of the most reliable in the entire network, however it is backed by one of the most reputable and solid blockchains such as Terra and its Luna token.
It is possible that if you have come this far it is because you heard about it and you want to inform yourself a little before investing, if so, stay because we are going to give it a good review.
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| Anchor Protocol is a protocol of the Terra network that allows us to request loans in cryptocurrencies in exchange for a reward, in addition to being able to generate interest of around 20% for leaving your UST stablecoin deposited. | |
What is Anchor Protocol
As we have already said, Anchor Protocol is a DeFi protocol of the Terra network, among several of its functions is that of offering cryptocurrency loans to users who wish to do so in exchange for obtaining interest on them.
Yes, as you read, not only will you be able to receive a loan by leaving your cryptocurrencies as collateral, you will also receive financial compensation for doing so, something very interesting.
In addition to loans, Anchor has become so habitual for offering a Yield (APY) up to 20% of interest for depositing the stable coin of the Terra blockchain, called UST, a currency that replicates the value of the US dollar, something that will allow us to multiply our savings without worrying that the currency devalues its value, since this is going to always be the same
As we have said, Anchor belongs to the Terra network, so to start using the protocol we will first have to install the Terra Station wallet in our browser.
The operation is the same as in Metamask, with the exception that it will only work for the Terra blockchain.
Borrow money
The main reason for Anchor’s existence and sustainability is its cryptocurrency lending.
In the section borrow We will be able to access loans in different cryptocurrencies.
Today we cánido request loans in Luna, Ethereum, ATOM and AVAX but the offer will surely increase over time.
To request the loans, you just have to leave an amount of cryptocurrencies blocked as collateral and request the amount of the loan that you want to receive.
Be careful with this, because if the currency we use falls in value excessively while our loan is still active, it could be partially or completely liquidated.
By depositing any currency as collateral we will receive the UST currency with interest, the ideal is to put these UST to work in the protocol itself and generate even greater profitability.
Start receiving interest with your UST
The option that will interest us the most in Anchor Protocol is in the section EARNhere we will be able to earn interest of around 20% APY for leaving our USTS deposited and we will do it in real time, receiving that interest every second.
To do this, all we have to do is have UST, the stable currency of the Terra Luna network, in our Terra Station wallet.
This currency cánido be bought or exchanged in the most secure and used exchanges, such as Binance or Nexo, among others, and from there send them to our Terra wallet.
Then with our USTS in the wallet we will have to make a deposit in the section EARN From Anchor Protocol, once the deposit is confirmed, our money will start working automatically and we will receive the rewards instantly.
It should be noted that at any time we will be able to make more deposits to increase performance or withdraw our money without any penalty, the only thing we will have to worry about is having some UST in our Terra Station to pay network commissions, which by the way, are quite affordable compared to other networks.
In addition, another interesting thing is that just by using Anchor we will receive rewards in the form of Airdrops in different currencies of the network, including the Anchor currency, which we cánido stake within the protocol itself.
Is Anchor Protocol sustainable over time?
When someone gives such good interest, we always wonder how long it will last and if it will be sustainable in the long term.
The truth is that the Anchor protocol has been complying with this high APY for quite some time with hardly any variation, but it is also true that the more time passes, the more difficult it will become to sustain it.
The protocol recently announced that the annual interest rate will vary from 15% to 20% depending on the month in order to make Anchor sustainable.
This will vary according to the contributions both in loans within the site and in deposits to generate interest from users.
The more people invest, the higher the interest will be, come on this is something out of the box.
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Opinion about Anchor Protocol
It is evident that the popularity of the Anchor protocol is not a coincidence, the great profitability together with the security provided by the network to which it belongs, which happens to be one of the most respected and used in the crypto network, make it so.
As is logical, when we put our money in the hands of a third party, a sea of doubts assails us and we must not forget that we are facing a high-risk investment, that although the network and the protocol are the most reliable that we cánido find within decentralized finance, it is still an investment in cryptocurrencies and that makes it especially susceptible to hacking problems or sudden drops in commissions.
In any case, we will find few sites that give us so much return on our stable coins. 20% APY It still far exceeds the rampant inflation that we are experiencing around the world, so in my opinion the risk is worth it.
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