# ANC Utility & Tokenomics Tweak

**URL:** <https://forum.anchorprotocol.com/t/anc-utility-tokenomics-tweak/3984>\
**Category:** General\
**Created:** [March 25, 2022, 10:27pm UTC](https://forum.anchorprotocol.com/t/anc-utility-tokenomics-tweak/3984 "2022-03-25T22:27:51Z")\
**Posts on this page:** 1\
**Page:** 1

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**Author:** ![Aniky](https://avatars.discourse-cdn.com/v4/letter/a/90ced4/32.png) [@Aniky](https://forum.anchorprotocol.com/u/Aniky)\
**Post date:** [March 25, 2022, 10:27pm UTC](https://forum.anchorprotocol.com/t/anc-utility-tokenomics-tweak/3984/1 "2022-03-25T22:27:52Z")

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**Utility**  
Should persons be allowed to contribute their ANC tokens directly to repaying borrowed balances.

• You can offset your balance 1:1 using UST, but if you elect to repay the balance in $ANC it will offset the debt on a logarithmic scale, i.e., the greater you use the more disproportionate the ratio.

> Blockquote e.g.,  
> 1–25 ANC = .98 ANC’s actual value  
> 25–99 ANC = .99 ANC’s actual value  
> 100-299 ANC = 1.01 ANC’s actual value  
> 300-399 ANC = 1.02 ANC’s actual value  
> …

The intended effect of this implementation is to discourage persons from instantly selling off their ANC rewards and incentivise accumulation / hodling.  
Plus, this added use case should increase demand and the ANC price.  
Furthermore anchor protocol will not have to actively buy ANC back.

**Tokenomics**  
Should the ANC rewards distribution rate be related to one’s borrow amt or net vested collateral.

There will be a standard base rate but might certain criteria be given an additional distribution rate:  
• the greater one borrows  
• the more assets one has put up as collateral  
• the higher one’s LTV ratio

The rational for this is to attempt to tackle the misbalance between the The Total Deposited, Total Borrowed, and Total Collateral.

These alterations in ANC Utility and Tokenomics could possibly be what it takes to replenish the yield reserve and make it self-sustaining.