Seriously we all know the high apy caused all of this mess, voting to reduce the rate right away to 7 or 8% would at least calm everything down, otherwise the ‘unsustainable anchor protocol’ is all anyone will talk about as the reserve is projected to deplete in the coming months.
I don’t think it’s the Anchor APY that has “caused” the UST depeg.
And if you look at the stats right now, the last two days the reserves are holding steady and at times even increasing. With deposits down to some 40% of what it was a few days ago, Anchor is practically sustainable. (Of course, that is in UST terms. What a UST is worth in USD is a whole other question.)
Unfortunately, I think it is. It’s been blasted all over every major news outlet for the last month that UST is really only used in anchor.
The problem wasn’t the 20% rate it was the fact that $14B worth of UST could run for the exits at the first sniff of a problem. That glaring nuke capability is what caused the entire unwind.
I was warning about this months ago that Anchor should have been using time deposits for boosted yields. Ie Incentivized capital controls.
If 70% of the platform was tucked away into a 30/60/90 day lock we wouldn’t have been in this mess right now.
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Right now I think we just let it ride. There is a huge UST peg risk now, lowering the rate won’t help solve anything.
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And the reserve is (sort of) stable now. If anything, still having an 18% rate in Anchor actually may be an incentive for some daredevils to let their UST remain there, or even buy UST “on the cheap” and move it to Anchor.
There’s a lot of risk-takers out there. Having the 18% APY may provide some, not a lot but still some, funds actually flowing in.
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