Back to basics - Anchor's rise from the ashes

We’re back at the beginning, and now it’s the opportunity to work on a comeback and be better, while apparently there will be a focus change on the stables mechanisms at the network, I believe that Anchor too should work on stripping out the bad and refocus on what made it unique.

Anchor selling point at the start, and somebody correct me if I’m wrong, was a fixed-yield deposit and lending market, fueled by liquid staking derivatives and a reserve for stabilization. We’ve started to deviate from the path sometime ago and became reliant on artificial source of yield to maintain that fixed rate.

Let’s start by stripping the bad,

  • Let’s lock down the yield reserve and allow no deposits from outside, no bailout allowed so we can’t become reliant yet again, this will hold us accountable;
  • Let’s refocus on staking derivatives, that’s what made us different and what was supposed to make it sustainable, so let’s focus on that. Doesn’t mean we can’t allow for non staking productive assets, but they get a different borrow rate, let’s set a target borrow rate (could be dynamically calculated) and whatever we can get from staking rewards is then deducted from the rate the borrower has to pay;

We can then keep the good,

  • Better ANC tokenomics is a must, we saw that the token is being used as a reward mechanism but became far to easy to manipulate and held no other value, so the ongoing proposals are still paramount to the future success of the protocol;
  • Cross-chain efforts, now more than ever, could be the hail mary;
  • Keep the dynamic rate recently setup, but maybe let’s make it adjust a bit faster, we fill and use the yield reserve to fill the gaps between adjustments, should it drain then trigger an immediate adjustment to the minimum viable rate (rounded down for simplicity sake); Won’t be fixed yield, but it will be stable-ish yield.

Let’s improve even further,

  • Let’s evaluate other stable pools, UST will have to earn back it’s trust, so we should consider adding other stables, I’d prefer if we kept with decentralized options;
  • We must find other sources of idle UST monetization, if Vertex is still around I still believe it to be the best choice, but maybe we could consider protocol partnerships (other lending markets that require stable capital, insurance protocols, …);

These are my thoughts right now, everything happened way faster and way harder than I ever expected, but I’m here and willing to help.

Stay strong, this too shall pass.

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Absolutely Anchor needs to come back better & regain the trust of the Terra community. Not just the LUNAtics but the whole cryptospheare.

The selling point of Anchor has always been that 20% interest on a stable coin for just depositing into the function & doing nothing. That in my honest opinion NEEDS to go. 20% in unsustainable no matter what. That’s a point I would add to stripping the bad.

I agree with no more bailouts. It’s happened 2x so far & it makes the whole system look bad & show’s how unsustainable it is.

Not exactly sure what you mean by this.

Better ANC tokenomics is a must. The proposal with veANC was a good start to this. (I thought that was suppose to come out today)
Locking up the ANC for a non-monetary token for governance I like that idea.

That’s the way to go as the future is all cross chain.

Not 100% sure about this. How many other decentralized stable pools are out there? Potentially adding something backed by USDC is a better option because we know that’s (even centralized) is overcollateralized .

Just some of my thoughts on your points.

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bLuna and bEth were liquid staking derivatives, yield was captured by Anchor as payment for the loan, we then started to switch to derivatives that didn’t pay yield, such as wAVAX (that while also a staking derivative, worked in a different way) that didn’t pay any yield to the protocol, only the borrow yield was being paid.

USDC and USDT could be options, but I’d prefer things like Frax, MIM and DAI, even if there’s bad blood going around, while their decentralization is not perfect, it’s at least slightly better than USDC and USDT. But I’m not picky, it’s my opinion that UST could make a comeback but it’s gonna take a while to have the public trust, other options could help fill that time gap.

I think lawsuits are coming. I wouldn’t touch anything at this point or you could become a target of an investigation. People died today. UST is over. Luna is over. Those need to be fully expelled from all DeFi protocols before any future rebrand of Anchor comes about.

This time only allow fully collateralized stables and high quality proven yielding assets (eth). Any algorithmic stable should be deemed a ponzi scheme at this point.

Thousands of people lost everything this week. Some took their own lives. That can’t be repeated.

Do Kwon should go to jail.

I hate to be a hater but can you imagine a jury watching this clip from a few days before it all collapsed?

I hate to be that guy, and trust me I’m down bad, but if you want to reap the benefits of self-sovereign finance systems, you have to be ready to take the self-accountability… there’s no indication this was a malicious insider attack, so Do Know isn’t to blame.

The inner workings of the system were public, his persona was public, everything was all out in the open, whoever decided to invest (me included) has to take responsability for those decisions, it’s not “i’m a genious because it’s up 10000%” and now “I was scammed because it went to 0”.

There’s plenty of threads for this kind of self-pity and blame going around, I’d rather leave this one open should anyone still wish to ideate the reborn of Anchor Protocol.

How can we get our bETH out now? It’s wrapped stETH but Terra chain is halted. Is there a solution?

We put these assets here to invest in the Anchor protocol. Anchor needs to offer a solution to unwrap back to stETH.

Now more than ever I believe we need to figure how to bring Anchor over to the v2 chain, should it pass. Anchor never needed UST, the model can work with any other stable.

I hope the protocol doesn’t have to die with TFL.