# \[Proposal\] veANC, Anchor Voting Escrow Tokenomics **URL:** \ **Category:** Mechanism\ **Created:** [April 27, 2022, 4:29pm UTC](https://forum.anchorprotocol.com/t/proposal-veanc-anchor-voting-escrow-tokenomics/4545 "2022-04-27T16:29:53Z")\ **Posts on this page:** 1\ **Showing post:** 3
**Author:** ![intrepid\_user](https://avatars.discourse-cdn.com/v4/letter/i/a4c791/32.png) [@intrepid\_user](https://forum.anchorprotocol.com/u/intrepid_user)\ **Post date:** [April 27, 2022, 5:26pm UTC](https://forum.anchorprotocol.com/t/proposal-veanc-anchor-voting-escrow-tokenomics/4545/3 "2022-04-27T17:26:31Z")
veCurve works well because there are constantly new projects trying to get access to liquidity on Curve. It also makes sense for DEXs like Astroport, for which accumulation of veTokens serves much the same purpose. But for Anchor, are we really expecting that protocols that make liquid staking derivatives are going to fight over Anchor to get their gauge voted in? There are a limited amount of these protocols and once established, the network effects are so strong that it really doesn’t make much sense for new entrants to come into the space. For instance, Lido already controls almost all liquid staked ETH. Luna is a bit more competitive with LunaX from Stader but it’s still an oligopoly. I assume other chains will be the same. I just see this to be a rather ineffective solution. It might do _something_ but is it going to do anything substantial? I hope to be proven wrong but I don’t think so. Anchor’s fundamental issue is that borrowing is just _too expensive_. Between the interest rate and the yield you are giving up, Anchor Borrow is simply uncompetitive in the current marketplace. You have to incentivize borrowing first and foremost. The veANC model could be applied to this, in that users who lock up the most amount of ANC will have the most amount of ANC emissions directed to them, making borrowing cheaper (perhaps even be _paid_ to borrow). **This** will give incentives to protocols building on top of Anchor to accumulate as much ANC as possible to give borrowers that use their interface the _best_ possible borrow rate (think like Vector Finance & Platypus except w/ borrowing rather than single sided staking). Something like this is a pretty good idea as well: > [@\[Proposal\] Borrower Rewards Staking for +10% borrowing APR](http://forum.anchorprotocol.com/t/proposal-borrower-rewards-staking-for-10-borrowing-apr/3990): > > This is my take on the Anchor v3 proposal and how we can improve borrower yield (thus driving borrower demand) and reducing emissions. I will post other forum links relating to this later. Borrower incentives are often dumped right away to counterbalance the interest earned, this is how the realized 0% borrowing rate is created. However this creates persistent sell pressure on the token requiring frequent buybacks to maintain price stability. My proposal both enables enhanced positive interest… --- _[View the full topic](https://forum.anchorprotocol.com/t/proposal-veanc-anchor-voting-escrow-tokenomics/4545)._