The Anchor protocol community proposed to reduce the target yield on UST deposits to 4% per year. It is hoped this will help restore parity of the algorithmic stablecoin with the US dollar.
The author of the ’emergency proposal’, Daniel Hong, was one of the developers of the original Anchor smart contract. He explained that lowering the deposit rate would curb the flow of additional UST into circulation.
3/ I believe TFL should have done this first, but I’m doing it as one of the three people who worked on the initial contract design of Anchor.
I equally love everything I have done in my lifetime, regardless of how I feel about it later on
— Daniel Hong 🪄 (@unifiedh) May 11, 2022
Anchor uses a floating interest rate. If the initiative is approved, its minimum value would be reduced to 3.5%, and the maximum to 5.5%. The vote on the proposal will run until May 18.
At the time of writing, the yield on the protocol stands at 19.64%.
Since the crisis began in Terra’s ecosystem, nearly 9.5 billion UST have been withdrawn from Anchor. The largest outflow was recorded on May 9 — 3.33 billion UST. The protocol’s yield reserve is also nearly exhausted.
Earlier, BlackRock and Citadel said they were not involved in the collapse of UST.
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