In a tweet published early Friday, Do Kwon, the founder of Terraform Labs, the developers of Terra Luna (LUNA) and Terra USD (UST), announced an increase in Anchor protocol reserves by 450 million UST ($450 million). Voted by the Luna Foundation Guard on February 10th.
Anchor serves as the key savings protocol of the Terra ecosystem, offering up to 20% annual interest on UST deposits paid by borrowers.
Previously, protocol reserve fundsreduced to $6.56 million due to insufficient loan demand to support the influx of lenders. and when such imbalance The protocol uses the reserve to pay the lender a contractual return. From the beginning of December to the end of January, Anchor’s reserves dropped by about $35 million.
Terra’s developers agree that such returns are not sustainable in the short term. And as a long-term solution, Terraform Labs plans to start using compound liquid staking derivatives as collateral in Anchor v2.
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