How to buy Anchor Protocol (ANC) in the US

What is Anchor Protocol?

Anchor Protocol is a savings-based DeFi protocol on the Terra blockchain that supposedly enables you to earn higher returns on your savings as passive income. ANC is its native token which is used for staking and governance. The protocol accepts deposits in Terra tokens and enables instant withdrawals while paying you a “low volatility interest rate.” Terra is a blockchain protocol that utilizes stablecoins pegged to fiat currencies to enable price-stable payment systems. Anchor’s core proposition is a principal-protected stablecoin product that pays you a stable interest rate on your savings.

For generating yields, the protocol lends deposits to borrowers that deposit collateral in the form of staked assets from major blockchains. The collateral is known as bAssets. The interest rates on deposits are stabilized by sharing a fraction of the yield of the deposited bAssets with the depositor. In addition to the fixed interest rates, the protocol also guarantees a principal-protected system. The principal is guaranteed for depositors by liquidating collateral from the borrowers.

This liquidation is done through liquidation contracts and third parties that indulge in arbitrage. Users that aren’t interested in depositing or borrowing funds, can participate in this protocol through Anchor’s liquidation pool. This is a high-risk high-return product that enables principal protection for the protocol’s debt positions to the lenders. Such users earn rewards through passive premiums and liquidation fees on the execution of the liquidation contracts.

Anchor Protocol (ANC) is the 226th largest cryptocurrency in the world by market cap, valued at $154,769,344. The current price of Anchor Protocol is $1.71, which is -0.396% lower than yesterday. Prices have ranged between $1.74 and $1.7 over the past 24 hours. All prices are listed in US dollars and accurate as of July 28, 2021 03:07 UTC.

Where to buy

Unfortunately, at this time no major exchanges in the United States offer this coin. However, you may be able to purchase it with another cryptocurrency, just be sure you're following all legal restrictions and requirements.

Consider buying a different cryptocurrency after comparing popular exchanges.

How to sell Anchor Protocol

You can cash out your ANC with the same exchange you bought it through:

1. Sign in to the exchange you have ANC on.
   If you store your Anchor Protocol in a digital wallet, compare crypto exchanges to sell it on.
2. Place a sell order.
   Choose the amount of ANC you'd like to sell.
3. Complete your transaction.
   Confirm the sell price and fees and close your sale of Anchor Protocol.

What to consider when buying Anchor Protocol

• Smart Contract Risk: Whenever smart contracts enable a DeFi protocol, there are always inherent to smart contracts themselves. There have been many instances of smart contracts being hacked (Spartan Protocol, Meerkat Finance, etc.) on DeFi protocols. Anchors uses the Web Assembly smart contract that enables the depositing and withdrawal of Terra tokens. Thus, always do your own research on the vulnerabilities the protocols smart contract could have.
• High Dependency on Terra: Anchor is heavily dependent on Terra’s money market and in particular its native token, LUNA. Like any other cryptocurrency, there are market volatility risks that LUNA has. If LUNA loses more than 50% of its value, you should have collateral that keeps the loan to value ratio less than 0.5, else the liquidation risk increases significantly.
• Regulations: Since Anchor is highly dependent on the Terra network’s stablecoins, any regulatory impact on Terra’s blockchain model can heavily influence the platform’s entire business model. Currently, Anchor operates in a regulatory grey area as there is no clear regulation on stablecoins yet in most markets. If a disruptive regulation is enforced, it could lead to the collapse of the platform.
• Economic Incentive: The protocol’s promised 20% yield comes from staking rewards from borrowers. They are incentivized to borrow by a high annual percentage rate (APR) of ANC in return. Once the APR reduces, it might not be enough incentive for borrowers to take funds using the protocol thus depositors won’t be able to earn a 20% yield as promised.

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