1/ Anchor public announcement #2:
Anchor will target 20% fixed APR.
This is by far the highest stablecoin yield in the market.
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2/ Wait, but how is this possible?
First, recall that Anchor lets you borrow stablecoins against your stake.
Instead of charging explicit borrowing rates, the system passes on your staking rewards to lenders.
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3/ … With Luna staking yield at 12% p.a. and LTV at 50%, this means that the system is able to generate at least 24% staking revenue on deposits – more than enough to cover the 20%.
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But what happens if Luna price drops by half? Isn't it dependant on price holding at the current level?
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Not at all - think about what happens when price of Luna drops. Existing loans get protected by margin calls, and new loans get created incentivised by increasing ANC incentives. Staking rewards remain fixed in other networks and countercyclical in Luna.
When will other staking coins like Atom, Dot, Sol be integrated into Anchor?