Today was all about the complete collapse from both Terra (LUNA) and the UST stablecoin† LUNA was at one point more than 99% of its value since the all time high lost and UST traded below $0.30. As a result of the misery surrounding Terra, Anchor (ANC) has also collapsed. ANC crashed by more than 80% in one day.
Anchor Protocol suffers from Terra crash
Anchor Protocol’s token dropped from just over $0.80 per token to just $0.13. At the time of writing, ANC’s value has scrambled back up slightly to USD 0.32. The fact that UST de peg Losing the US dollar is generally seen as the main reason for this decline.
Anchor Protocol is a loaner service that runs on the Terra network. Anchor’s main selling point was the fact that they were promised an annual interest of 20% for depositing UST. It is therefore of course not particularly surprising that Anchor is being hit hard at the moment. Eden Au, researcher at The Block Research, had the following to say:
The price of ANC has crashed due to the loss of confidence in UST and the Terra ecosystem as a whole, as a result of the UST de-pegging.”
Due to the major problems at Terra and UST, Anchor users are taking up their UST in large numbers. Most likely, this was done in order to excise their exposure to the problematic stablecoin as a matter of urgency. As a result of these recordings, Anchor Protocol itself also ran into problems.
“There has been a mass exodus from Anchor due to UST de-pegging as UST depositors rush to withdraw and sell their UST tokens,”
The total value of UST stablecoins held on the Anchor Protocol has plummeted by many billions. Last Friday there was still about 14 billion UST on the protocol, but in the meantime this has fallen to only 3.7 billion†
What the future holds for the Anchor Protocol also has everything to do with Terra and UST. If, for example, the Luna Foundation Guard finds a solution, there is a chance that everything will slowly recover. However, this is anything but a certainty.