What is the benefit to holding ANC? And what happens if ANC goes to $0.50?

I support this proposal.

not sure if possible to add this, just trying to anticipate problems further down the road:

Also need a way to limit secondary protocols governance overpowering since they will most likely have the most ANC. I am not too clear on the mechanisms of governance. So this may or may not be an issue.

I am in the same boat hopefully this proposal will change that investment around. I will hold my ANC-UST LP if this proposal is passed.

That sound like this would create good buy pressure, i support this idea

I only had a small position in ANC-UST LP but dumped the whole thing to buy Luna yesterday. I personally wouldn’t hold any ANC until some new support mechanism is agreed upon. It’s basically gone from $2 → $1.77 in the past few weeks and will likely fall further a vote can be passed to stabilize the currency. I personally voted with my feet and sold, so I would be a hypocrite if I didn’t advise you to do the same.

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I’m in the same boat as you. I’m primarily bullish Luna and use Anchor to leverage that bet. And you are correct that theoretically value of ANC does not have a direct influence on Anchor’s revenue. Unfortunately, we don’t live in a theoretical world and in practice, the continuous collapse in ANC price will affect the confidence, sentiment and actions of various actors within the ANC ecosystem. Here are the direct negative impacts of ANC’s price collapse that I can see:

  1. ANC-UST liquidity providers are abandoning the protocol @bpmccaff recently commented on whether he should pull out of the liquidity pool and I have to imagine he’s not the only one thinking of doing this (I have already pulled out).
  2. The continued collapse in the ANC price could cause both borrowers and lenders to leave as they might feel that their collateral is not safe within the Anchor protocol.
  3. Fear of a collapse of the Anchor protocol could cause more widespread selling of Luna as I’m sure some Luna holders have bonded it just to earn ANC rewards.

While I agree with your assertion that the long term sustainability lies with the amount of collateral bonded and that depends on attractiveness of HODLing the collateral. I think you might be underestimating the psychological impact and it’s effect on the “attractiveness of HODLing that collateral” should ANC go to 0.

Any thoughts or differences of opinion would be greatly appreciated.

Best Regards,
bM

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To summarize, this proposal is pretty much

  1. @bradp1234 ’s yield chart above

  2. And all ANC counts towards the % whether in LP Tokens, staked, or wallet.

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While I do agree some kind of ANC ownership interest incentive will help support ANC price, I think the longer term tokenomics of ANC is sound. ANC is sort of like equity in a bank where interest income is distributed to token holders via the ANC buy-backs and re-distribution to borrowers via rewards.

Current poor price action will likely continue as we are still in the year 1(217%) and 2(58%) high inflation phase of ANC token minting. Hopefully AuM grows much faster than the inflation as other protocols get plugged into Anchor. I think ANC is a hold at some point. In year 3 and 4 the inflation will fall 17% and 14% respectively before ANC supply stopped growing.

Hi all, here’s a different idea I’m thinking about to increase ANC’s value: Increase ANC value by whitelisting it as borrowing collateral.

Your feedback about anything I’m missing would be great.

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I think those who have sold $ANC will regret it in the long run. I can’t see Do allowing this to collapse something will be put in place to stop this. Already staking has increased to 9% although still not enough but it’s a start.

I suggest you keep hold and weather the storm. I think things will change for ANC just need patience at least that’s what I’m doing Do is heavily invested in Anchor so I can’t see it failing anytime soon.

For something to be put in place it has to be done here… through governance and voting. And the few suggestions I see aren’t coming from Do. It would be great if Do could chime in and give his thoughts though…

Let’s vote. We’ll never get a consensus here and turnaround time on responses is too slow…

I can’t wait for the vote to be taken.

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ditto, lets get on this. Though, the bull market in crypto might be getting started again and that (beta)could save ANC… would rather it could stand on it’s own two feet tho.

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I’m new to all of this and perhaps I’m missing something, but as a borrower I don’t give a rat’s ass what the APR incentive is because I’m here to accumulate as much LUNA as possible. I started buying at $5 and kept borrowing against the appreciation and the results, now that the coin is ~$30, is beyond my wildest expectations.

So why the hell would I care whether ANC is up, down, or at $0? Honestly, I haven’t even looked at the ANC rewards, I know they’re there, but that’s it.

I mean you are only looking at the lens of a borrower and in the scenario of a bull market.

If there is a bear market again it would be nice to have ANC higher. There are also people in LP tokens and those that hold ANC for staking. It would be good if the price doesn’t drop…

Think of the broader scope

Making people hold ANC to get the top yield could become awkward, if ANC is going to be a base layer protocol that other protocols will use, not just users.

If the objective is to improve ANC’s price, governance could reduce the 20% yield to 18%. I doubt it’d have much effect on how many people deposit, since it’s a small change and still gives a better yield than any of the competition. BUT the increase to the yield reserve would allow for more ANC buybacks.
I think that’s the cleanest path to more valuable ANC.

Although since your post in July, ANC has rallied although not enough and is now steadily slipping down again. For me this subject has been talked about at length now and action by the Anchor team needs to happen. Whether that is increasing the staking rewards or introducing a bonded version alongside bEth and bLuna as discussed elsewhere. I asked in several places, when bAnc? But my question always seems to fall on deaf ears. If something is not done soon to rectify this I personally will be cashing out.

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Thanks for contributing, I’m very exited about this.
Spark9026

This new tokenomics model would be why you want to hold ANC - [Proposal] veANC: Evolving Anchor Tokenomics

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