Anchor yield reserves running dry in less than 40 days

So at the current rate the Anchor yield reserves will dry up in less than 40 days, and thats assuming the current deposit amount doesn’t increase.

What are the current plans to replenish the reserve? Will Terra and LFG replenish the reserves?


That’s the 10+ Billion dollar question that everyone is asking and LFG is ominously mum about.

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If it runs out, then it runs out. Every one always makes a big deal when yield reserve goes closer to zero

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bingo, it doesnt matter if the YR runs to zero, go do whatever you want we’re in for a capitulation event anyways so prep for it if you want to make some money. long term everythings going to neutral regardless of what happens.

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That’s a very dangerous devil-may-care attitude towards what would be a catastrophic event for Anchor and Terra through the mass panic (since 99.9% of users are not expecting it) and likely a depeg, it happening now of all times when all it takes to set off a massive fire is a small ember of doubt.

It’s really sad that the community is so disengaged and the real users (depositors) are not exerting pressure on LFG to do its job and at the very least stop dithering and give clarity on this either way, so if there is to be a mass exodus, at least it can be a train wreck in slow motion.

I mean in the past I suggested alternative revenue streams instead of the “just increase borrowing”. Doesn’t seem anyone was open to discussing anything outside of “increasing borrowing”. It is clear borrowing helps, but deposit will always exceed borrowing (which I have also stated way back last year). Nobody seemed to accept this reality.

I don’t know the rate Anchor Earn will drop to if yield reserve goes to zero. Lets say hypothetically 12%. What alternatives provide stable 12% yield anyways? People keep saying the masses will leave. But where? I am talking about same exact risk profile. 12% stable without buying a token, time lock, capital capped off. If there is alternative let me know.

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I just realized that Anchor will still have a USP at 12%. So why don’t we gate keep the Anchor Earn Rate to 12.1-20% depending on amount of ANC. The problem before with this was loss of USP.

No where else can you get 12% Stablecoin yield with no catch. This will also add value to ANC token

Two birds with one stone.

@bitn8 mentioned that TFL will not to top-up the yield reserve another time.
It will run out this time and drop to 6% APY (or even less).
Personally I think it’s a good stress-test for the Terra ecosystem.
We never really saw how Anchor behaves with an empty yield reserve.
An outflow of at least 1 billion UST should be expected, yet there is not enough CEX buying demand for such a big amount in a short time.
It’ll probably lead to a temporary de-peg, just as we had at the end of January 2022 when the last yield reserve almost ran out.
Also, note that Lunas mint-burn mechanism is volume capped, so a big UST outflow cannot be handled currently, given that the LFG Bitcoin reserve is not live yet.
It’ll be interesting. :slight_smile:


Can I see the mention? link?

Why is Luna mint-burn volume capped?

Don’t recall a depeg Feb 2022, looks like normal market fluctuations.

Actually only other hope for Anchor is having LP as collateral like MARS. Nice yields with those.

Where are you getting 1 billion outflow from and 6% Earn rate?

Seems like this anticipated crash is artificially manufactured…

Sheesh at least wait till Bitcoin reserve is live

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The UST redemption capacity is currently hard-capped at $293M UST:

Here’s what happens if you swap and burn a large amount of $LUNA.
You’re going to get a lot of spreads!
$LUNA was burned at $31.9 UST, despite the fact that the price of LUNA was $50.
That’s a 56% spread and $9 million in swap fees:

Read more here:

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Anchor can’t afford to pay 12% APY to 13,7B UST that were deposited on Anchor. Anchor currently only earns 31m UST from borrow demand per month while it has to pay over 221m UST per month in yield to depositors. The lend/borrow ratio is completely unbalanced even if the earn APY dropped to 1:1 to the borrow APY one.


Let’s not live in an imaginary land and recognize the truth. Everyone knows to what the rate will drop to when the YR runs out. To the sustainable rate. That is all a matter of public record. It is around and below 5%. At the moment 3.7426%.

It’s hard to fathom any depositor staying when the rate drops five fold. Especially since it’ll come as a shock to most depositors. Most deposits will promptly leave, most UST will be turned for LUNA, and the deposits will go to other DeFi and CeFi options that can provide double to quadruple the Anchor sustainable rate.

That being said, as deposits drop, the sustainable rate will increase (if borrowing stays the same, less deposits to distribute it to). So in the best case scenario deposits will drop to an equilibrium ratio where there’s enough depositors willing to accept the lowest acceptable rate.

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When and where was that?

What are those other CeFi and DeFi Options? And what are the rates?

Are we comparing centralized stablecoins as well?

TFL will not inject again, see here:


TFL no. LFG yes. You saw this tweet by Danku and the response of Do Kwon with “Sounds low” right?:

100% confidence it will be topped up. Do has always followed through. Anchor protocol is the backbone of the entire Luna ecosystem which drives UST adoption. You think they are just going to watch and let the earn % crater? Give me a break.


In all honesty I’d rather see them let the market do it’s thing. There will be no depeg, bank run? Most likely, not anything that could break the protocol. And even if they top off it will get consumed in a month, even if they did a billion. It’s free money for defi to cash grab and lfg knows it, easiest way to spur UST adoption and relatively safe. I think the meta is pump Luna value they couldn’t care for ust apart from market adoption.

Best to put in just enough to let dynamic rate drop from 20-15 but even then it’s too much artificial demand for one bank to handle. Then that way there isn’t a break in trust since we said 15 was floor anyways.

At this point we should consolidate mars and edge with anchor because we’re not letting markets balance themselves with all the hopium.

Also, no UST will not depeg lol. Please provide objective proof of concept before making the claim anchor run = UST depeg. We have had a million claims UST is dead for a billion reasons You’d honestly have a better shot at claiming BTC going to 0. I haven’t seen anyone claiming UST to 0 provide any better proof that what I’ve seen for Btc to 0.

No depositor is going to take a 20-30-50% loss of value on a stable coin during a major market capitulation event, even if they did there’s an equal number of buyers who will arb that I would happily dump all my crypto if I saw UST below 50% peg, hell I’d put the house down that’s the freest of money.

Moneys pulling from equities with 10yr at 3% do you really think people need 20% interest to adopt? That money isn’t any safer either tbh.

There is literally a curve 4 pool with UST and usdc go to curve forums and convince them to can it first before claiming UST is going to depeg cause anchor.

I think what’s happening is people see the YR deplete, realize that 20% isn’t real, and think the whole worlds going to end because of it. It’s a promotional strategy, it’s not meant to last forever, if there was any risk of something happening when it ends TFL/LFG wouldn’t have ever topped it off in the first place. The biggest risk is Anchor protocol falling off into the obscurity of many defi money markets. So the biggest risk is the ANC token price. Not your precious deposited dollars.

We have 30+ things going on (x anchor, vetokenomics, 1 click borrowing, new collaterals, institutional borrowing) that address the long term sustainability of the protocol and given how horrid the macro picture is for US dollars we are doing pretty good so far.

In the time Bank of America raised borrowing 3.4% anchor raised it 50% let that sink in.

Check quarter over quarter borrowing on anchor.

Great point! Anchor reserve must be saved at all cost…else it can destabilize the entire LUNA platforms.

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Just look at the order book for UST on any major exchange. It’s extremely thin. How does one change UST funny money into real money? Through a CEx. The liquidity of UST is proportionally far, far less even adjusted for market cap vs USDT, USDC and DAI.

There is not enough demand to keep the peg. It’s as simple as that. Unless you are imagining that some mysterious arbitrageurs will show up to save the day and buy up the UST at close to 1.00 when the outflows dumb bursts open.

The root cause is that there are too few real world uses for UST. It’s not used in most trading pairs at CExs. USDT and USDC are. Until UST gets more real world adoption and liquidity in daily use, it’s liquidity ratio to market cap will remain subpar.