Activity on Anchor Protocol to Come to a Halt After UST Meltdown

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terra luna UST

The post Activity on Anchor Protocol to Come to a Halt After UST Meltdown appeared first on Coinpedia – Fintech & Cryptocurreny News Media| Crypto Guide

Anchor Protocol, Terra’s largest DeFi platform, has recommended blocking Anchor Earn and borrowing services to protect it from attackers. Its community has finally cast their votes to determine its fate.

Given that 70 percent of the stablecoin’s supply was locked on the platform, Anchor was virtually ground zero for the UST meltdown. As the stablecoin de-pegged, it experienced one of the greatest decreases in value history.

Users have elected to limit the operation of Anchor Protocol, according to the company. Apart from withdrawing funds and depositing USTC to purchase a UST, all activity on the platform will now be halted. Deposits with no interest, on the other hand, will remain available indefinitely.

This will allow mirror protocols, or borrowers, to utilize aUST as collateral to obtain tokens when a margin call is required. A total of 23.11 percent of users voted “Yes” in favour of the suggestions.

TerraClassicUSD is currently trading at an average price of $0.0120 at the time of publication. DO Kwon sent out an airdrop in an attempt to resurrect the Terra Chain, which had collapsed.

This move, however, was also designed to help holders of old chain tokens. Meanwhile, the price of the newly produced LUNA coin has plunged by 80% since its introduction. It is currently trading at $3.60 on average.

The Anchor protocol stated that it has been an integral feature of Terra from its inception. The majority of the residents want it to continue to exist. The community takes the decision seriously for its future.

Do Kwon hikes interest rates

According to a source, Anchor’s inventors have revealed that the protocol’s original interest rate was set to be 3.6 percent. The Terra head, Do Kwon, however, did not accept the proposition. Just a week before the launch, Anchor’s interest rate was raised to 20%.

According to the report, they fixed the Terra interest a bit higher than the bank rate to keep it constant. It was highlighted that the corporation did not have enough money to pay the interest. Terraform Labs’ internal design document, on the other hand, revealed that it was done to attract more investors.