So as stakeholders of Anchor and as the most desired product of every lending protocol out there I wanted to get an understanding of how other borrowers are using Anchor, what other lending protocols are their favorites and why, and what would encourage you to borrow more?
I’ll start. I found Anchor sometime around November last year, I use it for line’s of credit since 0-5% interest on cash is cheaper than what the bank will offer and stablecoin spread is low enough for me that fiat on-off is effectively free. My accountant has also confirmed that in my juristiction borrowing from Anchor then ramping to fiat is a tax free event so it eliminates the need for me to sell my crypto allowing me to allocate more capital to collaterals like luna/eth/atom/avax/btc , not that I ever liquidate or plan on doing so.
I do do a little yield farming on the side on other protocols with the borrowed UST however most of it get’s ramped into fiat for business.
I’m a big solunavax believer, I have tried tons of defi money markets out there with hundred more to try. Some of my other favorites are Larix and Apricrot on Solana since fees are cheap on that network and I can pull LP Mortgages where price and yield are more stable to help me project profit and mitigate risk versus holding collaterals. Negative interest rates from other protocols are not that appealing as what’s 1 or 2% compared to price action anyways. For me as long as the net borrowing rate is low or 0 I am happy with the loan as It’s being productive elsewhere. I think there is a bit too much gamification going on trying to incentivize native token value capture and borrowing, etc that are just not really working well, opening borrowers to incredibly complex positions. For me having the borrowing being simple, cheap is what I look for in lending markets. I try to stay away from yield chasing like “oh if i get 10% more here I’ll move my capital” or whatever since most of it is nonsense imo.
I would say between Anchor and other protocols my split is roughly 60/40 at this time and I’m slowly trickling more towards the Anchor side as I see work done on the git, discord, and forums, to make me feel confident in taking on the risk. Mars protocol has recently taken my eye however as the rate on UST is like 2% and doenst require rewards to support. My only concern is that people will catch on and arb Mars interest into Anchor for 20% like what happened on Edge.
I’ve looked into prism as risk free leverage however it’s just too complex of an instrument for my purposes.
I can see in the upcoming months / years more businesses and small businesses getting onboard with owning crypto equities and leveraging them for business line of credit operations. This is opposed to stock but looking at crypto tokens as bonded value of which I think puts Anchor right on the money.