I can see it this way as well. People got into Anchor for it’s high yield. But how long can that be sustained? Potentially when the peg recovers, people will use that opportunity to exit UST anyway weather it’s a 20% interest or 5% interest.
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Longer now that the amount deposited has dropped.
Yes, many will want to exit either way, but one think is certain, a lot more people will want to exit if Anchor yield isn’t attractive anymore.
How can one tell if the peg for UST is working as expected?
I see what you mean. Maybe it’s just me as I have a much different less greedy perspective than many others I guess. A 5% interest will keep me interested in Anchor enough as it’s still better than any traditional savings account. Not that I solely use Anchor as a savings account (I keep a traditional savings account as well)
But yea I see it from your perspective as well. But I also see that the Anchor reserves have gone down drastically as well. Assuming that people stay in Anchor is it still sustainable?
As well as there will be a lot of people who will altogether leave Terra as well, so there will not be as many loans being given, or borrowers to give that yield to the Anchor earn people.
The Anchor reserves have already been replenished 2x in it’s life & after the crazy stuff that has been going on lately, I doubt anybody has any capitol to add to it again.
They can’t replenish it again. So much trust has been lost in Terra that I just don’t see it possible.
I would rather there be a drastic reduction in the Earn function than to risk the reserves being depleted completely. Because if that happens. Anchor is done.
Instead of highly volatile, small volume asset like BTC, could the treasury be backed by Gold? PAXG or mIAU? At least all the Gold Bugs would be happy, until that market is manipulated to death. At worst we may inadvertently repeg the USD to gold.
I just don’t want this party to be over I guess.
Backed by an index of Gold, Silver? I kinda like that idea but without actual physical gold, who’s to say it won’t be manipulated?
The party ain’t over yet.
PAXG is ultimately redeemable for 1 troy ounce according to the brochure… Not that that alone is going to solve the manipulation possibility a la the Hunts brothers.
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After seeing the new voting proposal on Anchor…
Lowering the earned APY doesn’t fix the problem of why this attack happened.
Apparently, the issue we need to prevent this kind of malicious dumping attack.
Therefore, we shall rather focus on how to regulate a limitation of amount UST to be withdrawn on a daily basis, preventing ones withdraw huge amount in one day but split in different days.
So I ask everyone to vote “No”
That wouldn’t really be fair nor decentralized. Regulating how much one can withdraw in a single day.
We must be honest. 20% in not sustainable whatsoever. Weather that be today or 5 years from now.
Terra knows more than we do wether or not 20% Is sustainable or not. Terra would be the better one to know and to make change accordingly.
What Terra did not expect is the manipulated dumping attack which is caused by no regulation or whatsoever on the amount limit to withdraw.
Setting a withdraw limits based on ones amount doesn’t make it NOT decentralized.
Besides, lowering down the earned APY does not prevent this kind of attack from happening. One can still play this game no matter how low the APY will become
I worked on Anchor for a year since its very beginning, and I also know for a fact that 20% APY is not sustainable at all.
We all knew it was not sustainable.
Let’s be blatantly honest. Anchor has turned from something that was really cool – an exciting new financial primitive taking advantage of staking yield – into a f*cking ponzi scheme.
The attack was only a trigger for this ponzi scheme to collapse.
Regardless of how the attack actually turned out, as long as there is a money printing machine emitting UST to compensate yield, there is no way UST will ever recover peg.
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As others have mentioned, we need withdrawals to be halted when the peg is significantly off. Letting people panic sell leads to a bank run and that’s not something even actual banks can deal with. If we can place a 21 day unlocking period of staked luna, we sure as hell can place a timed lock on UST deposits.
I was in Iron finance when it crashed. Luckily I got out really early there but I never expected the same thing to happen to Luna which was the best performing asset in my portfolio. Who’d have thought we’d all be sitting on massive losses. Lesson learnt. Don’t get greedy. Crypto is brutal.
I agree. I think right now panic is driving the price down, when it works about as well as it ever did, and it should recover in a couple weeks. People who sold for 20 cents on the dollar, sheesh, what were they thinking, that it’s never going to work? Why were they invested in the technology in the first place then?
We all knew it was unsustainable but it became a tool to get money into the ecosystem. But I think people would be just as happy with 8-12%. Or whatever’s truly sustainable over a long run. Taking a hit in the beginning is part of the process of gaining market share. We might have overdone it.
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If there are people left here who still believes in Anchor’s ultimate vision, please vote. We need to pass quorum
Yes, but as I mentioned higher rates can only be discussed after this mess is over. Not now.
Based on how UST is currently being traded in the market , it doesn’t look like there is any peg in place ?
Please explain briefly how lowering down earned APY would help repeg?
I’m not sure if this is going to make any sense. Feedback appreciated.
The Fed Reserve raises rates to try and slow inflation. The dumping could be seen as inflation.
The rate increase may help slow the massive dumping (inflation).
The problem is that Anchor can not stay at an elevated rate forever due to profit and loss. If there no income, then we can’t pay a dividend.
So raising may help save UST, but it could kill off Anchor.
Like I said feedback welcome.
I don’t understand the point you are trying to make ?