Guide to Anchor Protocol on Terra — 20% APY on UST

Published in
4 min readMar 17, 2021

Anchor Protocol is a newly launched savings protocol offering low-volatile yields on Terra stablecoin deposits (UST).

The yield comes from a diversified stream of staking rewards from major proof-of-stake blockchains.

Where does the yield come from?

Anchor Protocol obtains yield from staking, money markets and ANC token incentives.

Governance sets an Anchor rate, which is the target APY to pay out to depositors.

Staking rewards from collateral make up the yield, and yield reserves and borrowing incentivses help the yield converge to the anchor rate.

Anchor Protocol defines two parties where a money market exists:

  • A lender looking to earn stable yields on their stablecoins
  • A borrower looking to borrow stablecoins on stakeable assets.

To borrow stablecoins, the borrower locks up Bonded Assets (bAssets) as collateral, and borrows stablecoins below the protocol-defined LTV ratio.

The diversified stream of staking rewards accruing to the global pool of collateral then gets converted to stablecoin, and then conferred to the lender in the form of a stable yield.

How to deposit UST into Anchor Protocol?

There are several pre-requisites before depositing:

  • TerraUSD (UST) in wallet
  • Terra Station Extension

A guide is available here.

Head over to Anchor Protocol’s Earn page and hit Deposit.

Enter the amount of stablecoins to deposit and hit Proceed.

Sign the transaction with Station Extension.

To withdraw, reverse the steps with the Withdraw function.

Borrowing UST from Anchor with…


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