One way to to increase deposits for Anchor is to make them more functional. What if deposits on Anchor could be paired with limit orders on Terraswap? So the user could deposit UST and earn 20%, while having limit orders for LUNA that would execute against that aUST, swapping for UST when the price criteria is met, and then into the asset which the limit order was set for. So while waiting for a LUNA dip the user could be earning a nice interest rate without needing to manually move between UST and aUST. This would also help liquidity on Terraswap so would help ecosystem.
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Thanks for the suggestion. I don’t feel it to be crucial for Anchor to promote Earn too much as it’s already very attractive, and other areas are of greater concern. However, I agree that this idea would add functionality to Anchor Earn and aUST.
In my experience, it is best to leave UST deposited for the long term. Fees from frequency transactions on Terra really start to add up:
Depositing UST to aUST incurs the Terra Transfer Tax @ >0.41%, which goes to Terra Validators. Then, withdrawing that UST again incurs the tax to send it back to you. Then you are taxed again to send the withdrawn UST to Terraswap. Then there’s Terraswap’s 0.3% exchange fee. There’s also the chance that on-chain LUNA-UST exchange offers a better exchange rate than Terraswap. Then there’s all the gas costs around all these transactions. Who pays the Gas and Tax to exchange aUST for UST when the trade is executed?
There might be clever ways to optimize all of this, but I think it’s a bit early. This idea would first require on-chain Limit Order functionality for TerraSwap, which is quite out of scope for Anchor. Thereafter, one could then look into adding aUST as a placeholder for UST. Honestly, I don’t see this being a focused on any time soon. but I hope you continue to contribute ideas to the forum.