What is Anchor Protocol DeFi crypto & its ANC token?

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 What is Anchor Protocol DeFi crypto & its ANC token?
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Highlights 

  • Anchor Protocol competes with the likes of Maker Protocol in the DeFi sector
  • ANC serves as its native token, which is used in incentivizing and also in governance
  • Anchor Protocol’s main feature is its claim of a “stable” rate of interest for depositors

Passive income has become a popular trend in the volatile world of crypto assets. It suggests a different way to earn from cryptocurrencies, which includes depositing the holding at some place. This deposit is picked up by other users that must pay ‘interest’ to the depositor.

Decentralized Finance (DeFi) platforms are said to be enabling such services for crypto enthusiasts. But DeFi platforms come with their own risks, including the borrower using the deposited cryptos but never paying back. Reports suggest that billions of dollars worth of funds were lost last year in DeFi scams.

That aside, one project is claiming to provide a “stable” interest rate to depositors. Let’s know more.

What is Anchor Protocol?

The project claims to be a DeFi player, but with a difference in that, it would enable stable earnings for users. The protocol states it uses block rewards of proof-of-stake networks to achieve a “stable” interest rate.

Also read: What is Freedom. Jobs. Business. crypto project & its native FJB coin?

“bAssets” seem to lie at the heart of the whole arrangement. These are collaterals that are sought from the borrowers using Anchor Protocol services. bAssets or bonded assets, the project states, are linked to major blockchain networks. The yield that accrues to these bAssets is used to pay the interest to the depositors of stablecoins.

Anchor Protocol claims that the feature of “stable” rates with bAssets as collaterals makes it better than other DeFi projects like Maker Protocol.

Anchor Protocol (ANC) crypto

The ANC token has a role in the governance of the Anchor Protocol project. Besides, the project mentions the token’s use as incentives. DeFi protocols have a native token that enables voting by its holders. Maker Protocol, for example, has the MKR token.

Also read: What is Libero Financial crypto that promises fixed APY?

ANC crypto’s price

The ANC token, with a market cap of over US$740 million as of writing, is a top 100 cryptocurrency on the CoinMarketCap list. The ANC token’s price recently shot up to nearly US$6 at the beginning of this month, but as of writing, it was nearly US$2.8.

ANC started 2022 with a price tag of nearly US$3.5, but at one time in January, the price had dipped to nearly US$1.3. Similar to other cryptocurrencies, including the biggest, Bitcoin, ANC has also been volatile with respect to price. Anchor Protocol’s price prediction is therefore not possible.

ANC crypto price in 2022

Data provided by CoinMarketCap.com

Also read: Suncor (SU) & TC Energy (TRP): 2 TSX stocks to watch as oil prices rise

Bottom line

Anchor Protocol claims features like bAssets as collateral to provide a stable rate of interest to depositors. These bAssets, it says, are blockchain-linked assets that can earn yields.

Anchor Protocol’s token is one of the top 100 cryptos, which makes it an interesting watch. The DeFi sector within cryptocurrencies is also one of the major trends like metaverses and NFTs. How it shapes the performance of Anchor Protocol’s ANC token, in the long run, is a wait-and-watch game.

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