The End of Anchor Protocol

By Steve Hodl | My Path To Fire | 14 May 2022


The collapse of Luna also means the end of the beloved Anchor Protocol. Anchor was the great Defi place where you could earn up to 19% on your "stable" coins. In the chart below you can see the huge run-up and popularity of the Anchor Protocol.

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There were many who questioned the sustainability of such high rates on a self-feeding system and that it could end badly. (I was not one of them).

Here we can see those who had funds still locked while the asset value evaporated when the death spiral kicked in.

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The collapse of the Terra network shows how quickly things can move in the crypto space and even with Defi solutions, it can be risky to lock your assets up for any length of time.

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Anchor proposes some emergency measures for restoring the Terra peg but there is likely no return for Anchor Protocol.

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The high rates are still being advertised. Is this the end of high-yielding returns on stable coins?

The extent of the carnage and losses can be seen below:

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Assets worth $18b have evaporated.

We can also see there is a much higher TVL of $487,81m. If the holders were unable to unlock and sell, they have probably lost everything.

Thanks for reading.

Resources:
Title image created in Canva using source image.

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Steve Hodl
Steve Hodl

Blogger and Investor


My Path To Fire
My Path To Fire

Personal Finance Blog

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