ANCHOR PROTOCOL OVERVIEW
Anchor protocol has been mentioned in dozens of article headlines and tweets with people calling it the future of DeFi and stablecoins. We were always suspicious about Anchor and Terra (The net based on Fantom, Anchor uses) overall, but after some research we’ve changed our mind completely.
You could call Anchor a regular token storage, though it differs a lot from others because of how it uses the pledge that depositors leave when lending assets from the protocol.
The assets that the protocol uses as a pledge are then used to maintain your interest rate as close to initial as possible and allow you to use a block of the pool for holding your coins in the protocol.
So you basically help yourself to maintain a stable interest rate while borrowing coins from other users of Anchor.
The next big thing Anchor provides us with are the so-called bAssets. Those are coins that give you property rights on other PoS assets, that you store inside the Anchor protocol and are connected with each other.
bAssets can also be staked, while still being totally interchangeable and fungible, so as an investor you get an opportunity to manage your investments much faster with no need to predict how much time you will need to withdraw your coins.
All the pledges, given by borrowers are also converted into bAssets and are used as internal governance coins (that was already mentioned earlier)
Web assembly smart contact is also an incredibly important part of the Anchor protocol.
Every block’s price of course differs from others and the deposit needs to be counted somehow. That‘a what the WASM does.
The algorithm calculates the interest rate according to supply and demand allowing the system to work properly.
What else to know?
- Anchor protocol only allows one operation request per asset for every transaction participant. All the active asset requests should be cancelled before putting up a new one. Every order can be cancelled anytime, if it hasn’t been executed already.
- The interest rate can become higher if the credit becomes higher then the pledge itself. That’s why the recommended TLV interest is 45% and lower. Anchor offers notifying users, when a TLV limit, they set is broken.
- The protocol is available on desktop browsers, using WalletConnect and as an application for Chrome. Now, you can also use Anchor on mobile devices as an application for mobile Wallet Connect.
- The internal ANC coin is just a regular community governance coin that gives it’s holders the control over loyalties and yield. However, it also acts as some sort of proof for the lenders.
Considering the functionality that Anchor provides to borrowers and investors, the coin certainly has a future. Experts claim that in 2022 the price of ANC will rise up to 3.668$ from current 2.84$ and all up to 7.058$ in 2023, so a GEM is being created right now.
As it was said above, we were really surprised by the idea Anchor carries and that once again shows that Fantom is the next big blockchain with even more revolutionary products incoming.