Anchor [ANC]: Troubling days ahead amid deteriorating deposit-lending volumes

It is rare to see a one-week ecosystem growth, on the one hand, followed by a one-week price decline, on the other. But that was the case with Anchor as it rose the correction fell to become the leader of the biggest losers this week.

someone dropped the anchor

ANC is down 32.72% from seven days ago, and while broader market signals can be blamed for the most part, its investor apprehension has also contributed to current conditions. On April 11 alone, the token fell 20.29%.

Anchor Price Action | Source: TradingView – AMBCrypto

While the total value locked on the network saw a significant increase over the past two days, the biggest one came from its partnership with Acala to boost the decentralized stablecoin space on Terra and Polkadot.

Acala will expand Anchor’s collateral options with the addition of Liquid DOT (LDOT) and Liquid KSM (LKSM), which will unlock latent borrowing demand for the TerraUSD (UST) stablecoin within the Acala ecosystem and Kusama.

Acala further explained how they would use aUSD for the same purpose saying,

“Acala & Anchor will also establish deep liquidity pools for aUSD (Polkadot & Kusama’s native decentralized stablecoin) and UST on Acala, serving as a gateway to the Polkadot ecosystem for UST users.”

So, in this way, the partnership represents an important step in unifying the Terra and Polkadot ecosystems to bring decentralized money to the masses. And at the same time, provide users with access to more liquidity and yield opportunities.

Additionally, the protocol’s native ANC token was also listed on Crypto.com this week.

But regardless, Anchor’s primary function as a lending protocol hasn’t attracted any substantial investment, as Anchor’s treasury continues to deplete with approximately $8.86 million remaining at this point. day.

anchor treasure | Source: Dune – AMBCrypto

This shows that while payments continue to roll, revenue generated by the protocol in the lending markets is steadily declining, raising concerns about the future of the protocol given that it recently replenished with 450 million dollars by the Luna Foundation Guard.

This is also verified by the growing difference between deposits and borrowings, which rose from $6 billion to $10 billion in the space of a month. So, it looks like, on a larger scale, things aren’t really looking up for the protocol.

Anchor deposit and borrowing difference | Source: Dune – AMBCrypto

About Jermaine Chase

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