Anchor Protocol (ANC) The price has managed to rise in the last 24 hours, preventing the crypto market from falling as traders try to take advantage of the relatively large return offered by the Anchor protocol. The token was last trading at $5.5, up 13%, hovering at around 10-month highs, the token’s total market capitalization stands at around $1.4 billion.
ANC, Terra (Luna) It was designed as part of the Anchor project, a decentralized lending protocol created by its developers. The project offers depositors of stablecoin TerraUSD (UST) 20% annual returns, one of the highest rates in traditional stablecoins.
By comparison, top stablecoins yield up to 12%, including Tether, USD Coin, and Binance USD.
In the midst of increasing volatility in the crypto market, it is quite possible that this 20% return is attracting traders. While ANC tokens are given as an incentive to deposit money into Anchor, the protocol regularly burns ANC to support its price. TerraUSD (UST) LUNA, another token linked to the coin, has also increased by 79% in the last 30 days.
Stablecoins also had the largest trading volume of their peers during February as tensions over Russia and Ukraine led investors to safe-haven assets.
Binance Launchpool Effect!
In late January, the ANC token was added to the Binance Launchpool, where traders can earn ANC by staking BNB, LUNA, and BUSD tokens during a 21-day lockdown period. The move marked a turning point for ANC, and the token has since risen 255% from a record high.
More recently, the Luna Foundation Guard, a community affiliated with Terra, closed a $1 billion private token sale to create a Bitcoin-denominated reserve for UST. The move adds more confidence to UST’s stablecoin status and will likely keep ANC returns high.
Reports suggested that Luna plans to further increase its UST reserves through another sale. The Anchor community has also recently proposed switching to a semi-dynamic yield to keep up with the growing demand for borrowing on the protocol.
Disclaimer: What is written here is not investment advice. Cryptocurrency investments are high-risk investments. Every investment decision is under the individual’s own responsibility. Finally, KoinFinans and the author of this content cannot be held responsible for personal investment decisions.