Bitcoin as collateral

Collaterals on anchor need to generate income, that is why we can’t add BTC


Still, what’s stopping us from creating a non yielding asset on anchor? It would deepen the ecosystem and add utility to mAssets. They could have a different borrow rate too. I know this would complexify the system, but that might be one path to improve it’s sustainability.


The borrow rate has to be differentiated for various assets. Non yielding ones like btc simply pay higher rate. Or put btc in a protocol or venue where it generates yield (but that does add risk). And yielding ones borrow rate can’t be same for all, has to use the same formula and consider the yield and when it’s earned (if avax has no yield, higher borrow rate, and if there is yield at cash out, then give a borrow rate rebate at loan close).


Well some form of wrapped bitcoin could be added, but it would have to have way higher interest rate to compensate for being non yielding

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With the new V2 borrowing, adding a wrapped version like wBTC could likely makes sense given the deeper relationship with BTC for the reserve pool. Increasing the assets available to use as collateral will help make the protocol more sustainable and useful.

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100% agree it’s time to move forward with this. With the growing relationship between UST and BTC given the reserve pool used to defend the peg, there have been calls to add wBTC as a collateral type on Anchor. While BTC is not a POS coin, an exception to the current Anchor POS strategy can be made because it has such a tremendous market cap and growing importance in the Terra ecosystem.

As soon as the reserve pool is live, it will be followed by a listing on Astroport.

A max LTV of 65% to monitor the risks for 3 months is recommended. During this time, more wBTC liquidity will be onboarded to the ecosystem, which would allow for a higher LTV.

Let’s get this up as a poll.


Without POS coins anchor wouldn’t work, and anyone who would use BTC as collateral would make protocol lose money, unless ANC rewards are put to 0

By owning a rune in a protocol or foundation
, what do you think about converting Btc deposited by users to Btc - Rune lp to earn 20-30% apr through the Btc deposited?

(Rune lp compensates IL for long-term deposits. Before that, you can secure a reserve for wBTC or set a lockup period to ensure stability against losses due to short-term deposits and withdrawals.)

BTC is a great asset, but it can also be detrimental to anchors if it doesn’t make a profit. Sustainable deposit methods should be discussed.

but you could use mBtc-UST, or any other btc LP pair

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100% on favor on this one. Even if BTC doesnt add yield for Staking, it Will add income by borrowing interest. Thats 13% additional interest at minimum. We could increase that interest for being a non yield generating asset. As simple as that.

We are drowning by paying the 20% to UST lenders. And, ETH borrowers are bot increasing as we would want.

Lets do this poll ASAP.

The protocol would need to remove anchor rewards for bitcoin, then it would be good, but is there BTC on terra chain I have only seen mBTC

No one use with high interest.

That is the problem, anchor won’t profit and generate revenue if BTC gets implemented like bLUNA, bETH, and wasAVAX.

Current distribution APR is only 7.5% and Borrow APR 13%, 6% profit for any asset now.

Excluding staking imports has a positive effect on the protocol. ANC distribution does not produce more as assets added.

you haven’t included APY of underlaying asset, around 10%, so distribution APR is 7.5, and borrow APR is 13%, so 6% of the profit on loan but you haven’t included profit of collateral which is 10%.

Yes. It’s not that there’s no profit. lower than bLuna, bETH. So not bad thing for anchor.

I think the focus with xanchor is to operate like a traditional money market and offer 0% rates by offsetting the increase in collateral value (for assets like stavax, bluna after upgrades are complete, steth)

This allows anchor to offer a variety of assets as collateral not just yield bearing but IV increasing. It’s what the entire market is trending towards. Bitcoin has a unique characteristic as a reserve currency like gold or dollars so it would only make sense to offer loans for it.

Eventually it won’t be profitable to borrow UST on anchor and deposit for aust as anchor moves towards a more sustainable model. The new idea is to accrue anchor which would capture sustainable value through features like vote eschrow and rev sharing.

But the point of Anchor is not to be a traditional money market, it’s the point is to give a stable high yield to attract new users. The money market allows any collateral being able to be used for borrowing like on edge and mars.

If we added LP pairs for the collateral it would help hugely, change more to abracadabra money, if we used LP pairs that give rewards like from MIR, we would generate way more profit, and since the price of LP pairs is more stable, people would be able to make better loans.

Then after we get profitable, we add non-yeilding collaterals.

We have idea’s in the works in the community like this one here:

these other collaterals take time and liquidity before we can roll them out. Bitcoin is low hanging fruit and won’t be the dominant collateral on Anchor (it will always be Luna). So it should be fine to roll out now, it helps us get these other ones onboard at a later date.