[Proposal] Redirect ANC airdrops to ANC-UST LP

Background: This month, Anchor will stop incentivizing ANC-UST liquidity providers. Once that happens, there will be little incentive for people to provide liquidity in the pool, and many will likely dump their ANC tokens. This will result in less liquidity for ANC (resulting in worse exchange rates), and lead to more selling overall (because ANC locked up in the liquidity pool is ANC that isn’t being sold).

At the same time, Anchor is continuing to airdrop ANC tokens to Luna stakers through the next year. In contrast to liquidity providers, staking Luna does nothing to benefit the Anchor protocol. And the vast majority of Luna stakers simply sell whatever airdrops they receive (or the airdrops are automatically sold for them via bLuna, stLuna, Prism, and xLuna’s smart contracts).

Proposal: The 50m of ANC currently slated to be airdropped to Luna stakers over the next year should be instead redirected to rewarding ANC liquidity providers.


Anchor Protocol is airdropping a total of 50,000,000 ANC to early LUNA stakers. Visit the airdrop page and connect your Terra wallet to claim your rewards at a ratio of 1 LUNA : 0.16 ANC. An additional pool of 100M ANC will be distributed every week to LUNA stakers for the next two years.


What’s the airdrop site

I agree with this, as I’ve said before, the luring in of people to the ANC-UST LP pool was not transparent.

LP stakers are providing a valuable service, albeit one that was pretty over-subsidized in the last 3 months. ANC emissions to LUNA stakers are basically a redistribution to LUNA insiders that doesn’t benefit the Anchor Protocol.

Of course, LUNA / LFG have provided Anchor with massive other benefits and have more than earned their airdrops so far … but as long as we’re talking about rationalizing all incentives to make Anchor more self-sufficient, I think this should be more widely discussed too.

I’m not even sure TFL / LFG are the prime recipients of ANC airdrops. The prime recipient is likely the Lido bLuna contract. Each bLuna represents 1 staked Luna, but all staking rewards (including ANC airdrops) are sold for $UST and distributed to bLuna holders.

Staked or bonded luna does great job


Do K. had originally proposed changing the distribution parameters for ANC airdrops to those not in the top 10 validators to encourage further decentralization.

It seems this idea has changed into taking the remaining airdrop balance and burning 70% and then airdropping the other 30% to anyone delegating to smaller validators, not in the top 10. This will help with emissions and further encourage better delegation distribution across all validators.

If we think we need more ANC incentives, I don’t think redirecting airdrops for a different purpose sets a good precedent. If we want to add more ANC borrow rewards, possibly for new chains we are moving to further encourage more borrowing there, the community fund is the place to pull the funds to do this.

I think we’ve since learned that airdrops in general aren’t a good way to distribute governance tokens, because there is zero correlation between being a Luna staker and being interested in governing a particular protocol (i.e. Anchor). I don’t think there’s any “bad precedent” to be set by adjusting Anchor going forward to reflect our learnings.

ANC emissions should be set up to align with the interests of the protocol – in other words, emitted to people who are invested in and providing value to the protocol. This would include the liquidity providers, which is what allows the public to be able to buy ANC tokens, and allows stakers/borrowers to take profit.

I agree that decentralization is a separate, important goal. But we should tackle that goal using tools that are actually designed to promote decentralization (such as by voting on which delegators are used by Lido, Stader, and Prism). Simply adjusting the delegator list used by Lido would have more impact on decentralization than just about every other change we could do combined, given the huge amount of Luna staked through Lido’s bLuna and stLuna contracts.

It’s good to give $ANC where we really need it.

Losing liquidity is probably another sad news for $ANC.

The current $ANC position is so tragic like “selling the $ANC token you received as a reward is the best option.”

Someone says it’s not good to lure liquidity providers into $ANC reward.

Is there any other value for $ANC now?
Most people choose to sell the tokens they receive. The price is telling us.

Sadly, $ANC reward for LP is one of the few good options for most $ANC holders.
(Actually, it’s the only one.)

Everyone sells tokens.
Then we have to think about who is contributing even a little more to Anchor Protocol.

Naturally, it is a better option to reward those who provide liquidity.

This will have a significant impact on the Mars protocol also.

If interest is lowered due to the suspension of $ANC reward for LP, there is no reason to borrow UST from Mars protocol and maintain LP with leverage.

Like other Terra ecosystem tokens, $ANC is making a huge sacrifice for $LUNA.

I hope we can go in the right direction from now on.

So, i agree.


We should seriously consider this proposal…

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Any Anchor whales willing to create a text proposal? (Anchor website → Govern → Create Poll → Text Proposal)? (Anchor)

The proposal is to redirect those airdrop rewards to the people who are providing liquidity to ANC (so that the ANC-UST LP continues providing ANC to liquidity providers). Most of the people staking Luna just auto-sell their airdrops, which puts further sell pressure on ANC. (Luna staked through bLuna, stLuna, LunaX, and yLuna auto-sells ANC airdrops). Airdropping ANC to the stakers therefore does more harm than good to ANC.

The sell pressure will be even greater now that ANC LPs aren’t incentivized, because there’s going to be less liquidity to absorb the sales (meaning each ANC sold lowers price even more).