All operations on Anchor Protocol will reportedly be put to a halt except for withdrawal and deposit as the DeFi platform indicated that users have decided to limit its functions.
Anchor Protocol, Terra’s largest DeFi platform, recently proposed freezing Anchor Earn and borrowing functions to protect it from attacks. Its community has finally voted on its fate.
Given that 70% of the stablecoin’s supply was locked into the platform, Anchor was essentially ground zero for the UST crash. As the stablecoin de-pegged, it experienced one of the largest drops in value ever.
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Anchor Protocol informed users that they had decided to limit its functionality. Except for withdrawing funds and depositing USTC to acquire aUST, all platform actions will now be frozen. Deposits with no interest, on the other hand, will remain open indefinitely. This will allow mirror protocols, and borrowers, to use aUST as collateral to obtain tokens when a margin call is required. More than 23.11 percent of users voted in favor of the proposals.
At the time of publication, TerraClassicUSD was trading at an average price of $0.0123. DO Kwon launched an airdrop to resurrect the defunct Terra Chain. This move, however, was also intended to help old chain, token holders. Meanwhile, the price of the newly issued LUNA token has dropped by 80% since its launch. It is currently trading for $3.60 on average.
Anchor protocol stated that it has been an integral part of Terra since its inception. The majority of the community wants it to continue. The community decides its future seriously.
According to a report, Anchor’s designers have revealed that the protocol’s original interest rate was intended to be 3.6 percent.
The proposal, however, was rejected by Terra’s CEO, Do Kwon. Just a week before the launch, Anchor’s interest rate was raised to 20%.
According to the report, they set it a little higher than the bank interest rate to keep the Terra stable. It was discovered that the company did not have enough money to pay the interest. However, Terraform Labs’ internal design document revealed that it was done to attract more investors.