[Concern] The $ANC token is not proportional to the growth of Anchor protocol

For Anchor protocol to grow in the long term and achieve a very high and stable interest rate, which was its original goal, I think it is important to strengthen the competitiveness of the platform itself.

If the platform itself is competitive, I think we don’t have to rely on Yield Reserve, which is currently spending a lot of money.

And as the platform grows, $ANC tokens must also grow together.

In the current Anchor Protocol, $ANC is used in three ways.

  1. ANC-UST LP farming (The $ANC compensation will be over soon.)

  2. Stake for Governance (vote right, farming)

  3. For reward (Actually farming)

  • Current Governance Value
    The reason why most veANC proposals didn’t get a good response was because Anchor protocol is practically in deficit operation and the profits it generates are virtually zero, so there was no fight to secure governance by purchasing $ANC tokens.
    The veANC proposal can look very interesting if interest rates are differentially paid using $ANC.)

  • Most borrowers rely only on $ANC compensation and this is not a token of the kind issued forever and cannot continue either.
    (It can be adjusted by vote, but it is also negative for the price of $ANC.)

  • The compensation for providing liquidity will be terminated soon.
    It is good in that the amount of coins discharged decreases when the LP compensation of $ANC is completed.
    However, those who chose farming through liquidity over governance do not know why they should have $ANC in the future.

Currently, the interest provided by Astroport, excluding $ANC LP compensation, is currently about 15%, which is lower than simply getting 20% with UST.

This is expected to lead to low liquidity.

This article is not a suggestion for something, but just a worry.

My writing was somewhat rambling.

Anchor Protocol is one of the world’s largest cryptocurrency platforms that currently own 100B.
However, I wonder why this huge amount of UST can’t make use of the $ANC token at all.

Currently, the continued inflow of UST and Burning of LUNA seem to be good for the price increase of LUNA.

However, everyone knows that this method cannot be sustained, and if $LUNA loses its appeal, there is a concern that the platform will have to take risks with a chain of shocks.

The upcoming Dynamic Anchor Earn Rate is not intended to increase or reduce interest rates.
This is to slow the leakage of the running out of Yield reserve. In other words, it is only for reducing interest.
We know that it will not lead to a rise in interest rates.
And of course I’m not against this, and I agree that this was the best way to put out the urgent fire.

Sometimes when I look at the Terra ecosystem, I think the other tokens in this ecosystem are just being sacrificed for $Luna.

The current $ANC looks similar to the $SLP of the old Axie ecosystem. For now, I feel that the best option is to sell the $ANC token that I earned as a reward.

It is ironic that the growth of the platform and the growth of the token are independent of each other.

I believe there are people who have the same doubts about the value of $ANC. Please speak out.

I tend to be a little negative, but I still believe in Anchor and Terra ecosystems.
Thank you guys.


thank for sharing your thoughts
thank @narco78


Totally agree with you and thanking you for posting the observation.

Degen boys exploiting $UST for massive APR and $LUNA generally fairing well every time LFG funds the pot. $ANC should come into play to somehow make Anchor self sustaining and governance effective.

I have observed suggestions and calls for the community to remediate this as far back as JUNE 2021 but nothing has materialised. It does appear that nobody doesn’t want to rock the boat.

veANC looks promising if and when it is shipped.

All things the same we can only hope for some determined teams such as those behind Prop 18 to have another go. At least they were buying up $ANC!