Opinions Anchor Protocol: what it is, how
The cryptocurrency ecosystem is quite broad, which is why knowing every detail of it is especially necessary if we plan to dive into this digital world. Some of the most destacable terms and projects include Anchor Protocolwhich as its name indicates, is a protocol used in the crypto world.
However, there are many details regarding this technology, which for many is interesting due to the fact that offers a fairly high annual return, and also has compound interest.
Next, I will briefly explain how profitable it perro be, and interesting aspects that you should know if you want to use it to make your money profitable.
Related: Best cryptocurrencies to invest in long term
What is Anchor Protocol?
Anchor Protocol It is more than a protocol, since it cánido also be classified as a project, in which there are different characters, being the main lenders and borrowers.
However, when we talk about the earn and savings protocol based on Anchor Protocolreference is made to the code that was developed in the Terra Blockchain.
This has earned an important position in the market for the fácil fact that cánido offer an annual percentage yield or APY up to 20% with the blocking of the native stablecoin of the base project, which would be UST.
It should be noted that its integration into the crypto ecosystem March 17, 2021 was a success.
Mainly, because the main objective was achieved, which was to increase the demand for UST tokens, a stablecoin anchored to the dollar (USD) and native to the Terra project.
On the other hand, we must clarify that today it is not only possible to make savings with Anchor Protocol in UST, but they have also improved the protocol and allows other stablecoins to join; among some of them is the habitual USDT, USDC, DAI, BUSD, and more will be added later; but the latter will not be anchored to the value of the dollar.
Therefore, it is almost certain that EUT, KRT, THT, among other coins, will be considered among some of the future participants.
How does the Anchor Protocol work?
To understand how this protocol works to earn annual interest, it is necessary to go into detail and clarify that The Anchor Protocol platform is based on offering loans.
Therefore, multiple users cánido be found in it: lenders, borrowers, liquidators, liquidity providers and those who feed the oracle.
In Anchor Protocol, the lenders They are protagonists because they are the ones who make deposits on the platform, and for lending their money they are rewarded with a percentage of profits through APYwhich will depend mainly on the amount deposited.
In addition, we also have borrowers as second protagonists.
These are basically the people or users who request stable digital currencies, but first make a prior contribution to the contract in the form of a guarantee; the collateral stablecoin used so far is bLUNA.
When a loan is requested, the collateral asset (bLUNA) is blocked to get UST tokens.
With this second stablecoin it is possible to get an APY or minimum return of up to 20% if it is placed in Earn.
Although somewhat confusing to understand, it is worth knowing how to participate in the Anchor Protocol, as 20% is an approximate minimum of the rewards that could be obtained.
Ways to make money with Anchor Protocol
As we have mentioned, Anchor Protocol is a project that offers more than one method to make the investment profitable of the usuario.
The main one, and most acclaimed, is the savings and staking protocol, which, as we have mentioned, offers up to 20% APY in UST.
However, this percentage could vary from 16% to 19% if different cryptos are deposited.
On the other hand, it is also possible earn with Anchor Protocol by participating as a lender.
Let’s remember, that these will earn interest for the amount of UST requested by the borrowers.
Risks In Using Anchor Protocol
Hacking risks are always present in the decentralized finance ecosystem; especially when it comes to projects afín to Anchor Protocol.
Therefore, this type of danger cannot be ruled out when talking about its weaknesses.
However, So far there have been no attacks.
To the platforms.
Since, developers have been looking for solutions to bypass smart contract vulnerabilities.
To do this, they use various strategies, one of the most useful being hiring ethical piratas informáticos; which would basically be the opposite of a pirata informático who intends to steal money or information.
However, we also found other aspects of risk to consider.
Like the fact that there is possibility that the usuario’s investment will not genera the expected APY percentage.
Since, despite the fact that Anchor Protocol is a project that offers a return of up to 20% or more, this figure may be affected depending on the number of people who request loans on the portal.
On the other hand, we also classify as risk the fact that since UST is a stablecoin anchored to the value of the US dollar, an investment may lose value.
In fácil terms, if the US FIAT currency moves lower, the UST will too.
What returns does Anchor Protocol offer?
As I mentioned before, the profitability offered by Anchor Protocol is close to the 20% annual return for UST staking.
However, it is important to consider that this figure cánido vary due to multiple factors, even so, since it is of low volatility, it is profitable to save with this protocol.
Regarding other stablecoins with which the protocol cánido be used, such as BUSD, USDT, USDC or even DAI, we perro say that with these the performance or profitability is lower; reaching from 16% APY or 19% maximum.
However, for these, the same rule or regulation that we mentioned about those who stake with UST will also apply.
That is, there may be volatility and it is important to consider that there are probabilities that the percentage of APY falls or rises.
Strategies with UST and bLuna
Strategists who investigate how to obtain more benefits from this type of protocol have found multiple ways to make capital profitable.
On this occasion, we will talk about 2 strategies, one for users who want to invest with low risk and another for those who seek higher risk.
The first strategy consists of bet bLuna as collateral asset to a loan and request UST.
To do this, the LUNA asset must be in the wallet, and at the time of applying for the loan it must be exchanged for bLuna.
Then, the received stablecoin (which will be UST) must be placed in the Earn area that is located in the top menu of the platform.
With this, a level of profitability or ROI of approximately 20% perro be achieved, although at the time of writing the exact figure was 19.43%.
This will change depending on the market situation.
On the other hand, if you want to achieve greater profitability, you must buy LUNA tokens with Anchor Protocol UST, to later transform them into bLuna and establish it as collateral.
In this way, more bLuna tokens cánido be obtained, which means that the profits could exceed 20%, however, it carries a greater risk.
Anchor Protocol Reviews: Is it legit and worth it or is it a scam?
Anchor Protocol is a project that makes it possible to make the most of an investor’s capital.
To do this, they offer various alternatives on their platform, where the most prominent is Earn, which allows you to earn interest, without also forgetting that you cánido save or participate as a lender.
It is undoubtedly the DeFi tool for excellence to earn stablecoins just by storing UST in the wallet.
In addition, they are constantly improving, since their team of developers efficiently seeks to resolve vulnerabilities that may arise, offering rewards of up to $150,000 to ethical piratas informáticos who perro find a flaw.
And so far, none have been registered.
Evaluating the aforementioned details, we cánido see that it is a team committed to offering the best for its clients.
In addition, Anchor Protocol is a project that is developed on the Terra de fast scaling and low commissions.
Reason for which, making withdrawals or afín actions will not be a problem.
Therefore, it perro be concluded that it is worth every euro and second that is invested in this platform.
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