Conversation

Jeff Dorman, CFA

1/ Arca has posted a governance proposal to add much-needed utility to $ANC. Anchor, Terra, & UST are some of the fastest-growing protocols, but ANC has underperformed the broader sector. ANC lacks utility and is heavily incentivizing $Luna rather than $ANC Thread below

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Jeff Dorman, CFA

2/ ANC’s TVL has increased to $11.3Bn since inception less than a year ago while its token price has fallen 16%. MeanwhileTerra (Luna) has increased by 233%. (ANC underperformed by 249%)

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Jeff Dorman, CFA

3/ Investors, the community, and Anchor’s leadership have acknowledged the current tokenomics structure of the ANC token is broken, this has led to fruitful proposals and discussions but more needs to be done to ensure value creation for ANC and sustainability.

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Jeff Dorman, CFA

4/ Because of the underperformance and rewards framework, Anchor needs constant capital infusions as seen with the recent $450 million injection from Terra Forma Labs. twitter.com/stablekwon/thr

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Jeff Dorman, CFA

5/ This capital infusion will allow for continued high yields in a low yield environment, but it does not address large depositors who are taking advantage of the high 20% rewards structure with lack of any ownership of ANC tokens…no skin in the game.

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Jeff Dorman, CFA

6/ Because of this, we are proposing a fix to the tokenomics of ANC that would require depositors of UST with a balance of over $100k to own 10% of their deposits in ANC tokens to receive the full 20% rewards.

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Replying to

Interesting proposal! What impact do you think this will have on deposit appetite?

3:38 AM · Feb 24, 2022Twitter for iPhone

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Very interesting proposal. Can imagine secondary protocols being built for "normies" to gain access to 20% yield as protocol would acquire/lock proportional amount of anc.

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Obviously giant impact on deposit appetite. Which might not be such a bad thing if you want to keep the 20% going longer

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Do Fintech/neobanks integrating with anchor need to require users to convert a portion of deposits to anc to access full yield or have the company shoulder it? Otherwise, Fintech/neobanks will have to deal with half the yields which results in poor ux too

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its just about to go main stream, wait till after the market understands who terra is then make improvements for anc utility

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If there was a seamless way I could click a button in Anchor and have 10% of my balance DCA into ANC over x time...I'd probably be OK with that, as long as everyone else was forced to do it to. That way we all gain on the upside. Maybe that DCA happens from a special pool?

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Bad idea, delta neutral folks will not want ANC token exposure. Delta neutral funds represent a huge amount of Anchor depositors and they will move to other protocols.

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what are the other 20% apy stablecoin protocols? would love a list....

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This would derail UST growth. The 20% APY is the main selling point to introduce people to UST and mass adoption

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The rate would be 15% otherwise. And 20% if you held at least 10% ANC. Correct?

@Thomasmarkelly

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I guess I will have to split my deposits into 2000 different wallets.... ho oh well.

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