Hello and welcome to The Ether. Today’s Thursday, January 6th 2022. This episode of The Ether is brought to you by Orbital Command, a community validator on Terra dedicated to educating, expanding, and promoting the LUNAtic community. Take advantage of their Terra Luna Intel Report on Telegram using the link below. They bring you the hottest news and updates on all things Terra each and every day. Today on The Ether, we have the Anchor AMA Community Call. Let’s take a listen.
Hey, guys. Good morning. Good afternoon.
Hey, Mr. RyanLion, how’s life?
Good morning. How are you guys doing?
Hey, I’m fine. I’m not getting disturbed by any kind of price movements. So I’m just chilling. Having my liquidated live, which is great. I can get used to it.
Did you survive this time around, danku, and not get liquidated?
Yeah. Last time was was weird. And no, this time, no, because I mean, last time. This flash crash from last time, because usually I’m just running around 35%, 40%. It was impossible, right? That’s why even if I think there are right now great discussions out there of how you could maybe use a leveraged strategy to get more LUNA, which I think is a great strategy. But still, we need to be careful about that, right? Because there are times you cannot do anything against it, right? Doesn’t matter how many alerts you have. If it happens, it happens, right? [chuckle] And luckily enough, this time it’s such a slow bleed. [chuckle] But I’m not getting affected by this. I hope nobody else here, right.
Yeah, it wasn’t… The liquidity issue wasn’t too bad yesterday, we looked at it. I was watching really closely, barely dipped in to 6% premium briefly. And if you noticed, the liquidity was starting to build back up pretty high in the 3% and 4% category which for a move like that, especially focused on stock market…
I lost Mr. Nate, I hope everybody can hear me still.
Yeah, yeah, we can hear you, danku. Yeah, Twitter… Just so everyone knows, Twitter’s been having some problem…
Can you guys still hear me?
Yeah, I can hear you, Nate.
I mean, if it’s as worse as last time, it’s okay, right. Last time was wild. [chuckle]
Yeah, we had literally everyone was just dropping off the call, basically every time someone asked a question. So hopefully that won’t happen again this time. How’s it going, Sha?
It’s going good guys, going good.
Man, we haven’t talked in like ages, I have a feeling. Happy new year, happy Christmas. I don’t know what else is in between this, since the last time we talked Mr. Sha.
Yeah, it’s been an interesting little crypto low until this… I guess this dump. I was hoping for something more exciting after Astroport to pop up, not a total market dump. But at least it’s something happening.
You know, what’s interesting for me, maybe also, it’s related to Anchor Protocol. There is this new… I don’t know if you can call it protocol yet, but Outlet Finance, right? They will have a credit card, probably they will outpace also Alice. They have been on Terra Bites. Very interesting to listen to them. And they had yesterday also Twitter Spaces at WOLF Finance, never heard about them, but it seems more like a Twitter account in general about financial topics. And there were a lot of people that are not that deep into the crypto game. And it’s wild, if you listen to it again and we forget how deep we are already in here and how early we are. I know it’s a meme, but it seems to be reality right. They we’re asking questions like, “So this is 20% on dollar? Is this true?” And then they were asking other stuff like, “And what is the penalty if I withdraw my dollars?” And they say, “Well, there is no penalty, right? You still earn 20% based on what you just put down there.” And that’s stuff that we quickly forget. Yes, we are degens, 20% is boring. But it’s pretty good. It’s still pretty good.
It’s the truth, the truth. As I bring new people into Terra, they’re always like, “So you joined this 20%? Wow.” And I’m like, “Actually, I’m doing other stuff, maybe I’ll do the 20% later.” And they’re like, it blows their mind.
Yeah, it’s pretty good. And I mean after now, several, let’s say, weeks at home again, Christmas with family and onboarding a lot of people also to Anchor, it is still new and strong, right? It’s cool. Yes, we have also in Germany that Forex risk, but maybe Vertex hopefully helps so that more people also from other countries can take the benefit of Anchor Protocol with what they’re doing with hedging. So it’s all coming together, step by step. So I see the first request also coming up here, guys. So we’re just right now trying to give also Anchor Protocol, and the guys that are working hard here, a little bit of the chance to talk what they’re doing right now. And then I guess after 10-15 minutes, you can just request the mic, as always, and then you can ask your questions. While we’re trying to figure out the typical technical issues, I think Mr. Nate is also back again, right? All the bugs that Twitter Spaces is having right now. Let’s see if this is not as bad as last time. Nate, are you back up?
I’m back up. Let’s see how long this last. There’s an Android bug that’s known and I got an Android phone. So let’s see if I get kicked off again, I think we might have to end it because that means other Android users are going to have the same issue on the speaker side. But are we still good right now?
I think right now it’s okay.
You’re sounding great.
Okay. Alright, cool. Let’s cross our fingers. [chuckle] And yeah, so let’s kick this off. It’s exciting time right now. The way I see this is the stoic way, in times of hard time, this is where innovation and ingenuity comes out. This is where great ideas come out. And if we go back into some of the community posts and the forum posts over the last four or five months, we can see a push to get Anchor easier to use on other chains or from other chains. There’s been discussions about how would you use Metamask wallet or Phantom wallet over on Solana, right. And we’re excited to kind of announce, we snuck a little alpha in last week, but really the beautiful thing about Anchor is, it’s open source, and anyone can develop protocol, so anyone can build on top of it. So we can now bring Anchor cross-chain, right. And so borrowing is the main issue. Think about right now the steps and process it takes to come over from Ethereum. And now think about how we’re all core LUNA users, and how likely would we be to bridge our LUNA over to Ethereum to use it? No, probably not. Most of the stuff we do is on Terra Luna. So currently, you got to bridge your ETH over to Terra, and then you get native Terra on UST. But what if you wanted to use that on Ethereum, where you do all of your trades and things like that? It’s just a lot of stuffs because you’d have to bridge it back. So the idea here is building a native Ethereum on Ethereum.
Let me ask you, Nate, so does that mean that…
Great, you guys still hear me. All right, hooray, hooray!
Yeah. Yeah, It’s all running. Just ignore the Telegram sounds. [chuckle] So does that mean that the Anchor team itself was facilitating this or because you said, it’s anyway open sourced that you got approached by, I don’t know, a different team or people…
It’s a collaborative effort. And that’s great. So there’s going to be other teams that are going to be building part of the UI. And it’s going to be done in a decentralized way. Just like the Mirror Protocol, on the front side, there’s no longer one interface. There’s going to be several, right? That’s the whole idea is though, that it’s resilient. It’s decentralized, there’s redundancy. So think of it this way, a native hardcore Ethereum user is like, “I want to use a lending and borrowing savings protocol.” And they don’t want to come over to Anchor, they don’t even know what Anchor is. But we now have eth.app.anchorprotocol. And it would be branded and like the traditional ethos of the Ethereum ecosystem, right. So that they feel like it’s a part of the Ethereum ecosystem because that’s what we want it to be. This is what the ethos of the decentralization in crypto is about. And so they can go over there. They can natively bond their ETH, they can natively borrow UST, and then they can take that UST and go to Aave or go to Compound or whatever other… Say they want to go to some crazy DeFi you know, decentralized option vault on Ethereum, they can do that too. It’s going to be quick, easy. And so this is… Think about this. It’s like 15% of Terra’s market cap is bonded on Anchor, and it goes up and down a little bit, but I mean that’s the general idea. And only 9% of total collateral in there is Ethereum, yet Ethereum’s 14% bigger market cap. There’s tremendous potential here and we’re gonna be able to do all this through Wormhole, right. Wormhole and its functionality to send messages cross-chain, which just happened in the last few weeks, make this all possible. So we can move to Sol, Avax, Polygon, Dot, any Wormhole chain.
Got it. I mean there were also out there already some let’s say mini leaked alpha that I’ve seen I think didn’t spread so much that the chains that you mentioned are probably pretty close to really get some liquidity also on the Terra blockchain. Let me ask you a few questions and then you maybe give me an insight of if I get it correctly. Let’s say I’m on ETH now, right? There can be now, this front end. It’s deployed over there. I guess right now on ETH, you will also have because of the Wormhole, wrapped Wormhole SOL on ETH. Could I then also use that one to put as a collateral once bSOL is on Anchor? Or is then just really the native asset itself? Or maybe you know how?
How about I drop a little more alpha? [chuckle] We’re working hard here because we think the solution, and a lot of the key stakeholders believe this too, not everyone on the forums is big stakeholder, and so we have a lot of people contributing ideas through Twitter, Twitter messages, not everything’s on the forum. I would like more to be on the forum, but that’s not the reality of it. And we’ve got ideas to change the whole model as well, making it a lot easier to onboard new assets. And so what I’ll say is that, it won’t necessarily be you’ll need a bAsset. And this could change how quickly things are on boarded as well. Of course, this has to be discussed more. This has to be floated through the community, this does have to go to a vote. But this is an idea that I believe is going to garner a lot of support, and also speed up the process at which new collateral is happening. We need to expediate things. We cannot just sit here idly. As more deposits come in, the real key solution is making sure that we ramp up these borrowing things, which means making borrowing more simple, getting it across chain, and just taking 1% of some of these bigger market cap as collateral, that could nearly unleash $5, $6, $7 billion of new collateral which is just astounding,
Sorry, I was just gonna say yeah, I think this is gonna be huge for Anchor Protocol moving forward. Because I think we’ve already built… The community has already built a pretty amazing experience on Terra with Anchor Protocol as it stands today. And I think moving forward, once we create an experience where it’s very simple to use, it’s very intuitive for the chain they’re already on, depending on if they’re on Solana, or they’re on Ethereum, or what have you, it’s gonna seem like they’re interacting with Ethereum or Solana, or one of these chains through the UI. But the interesting thing here as well is the TVL will still count towards Terra’s TVL. Because Anchor Protocol lives on Terra. So it’s going to be good for the Terra ecosystem as well. Because we’ll be able to attract more collateral, we’ll be able to strengthen the protocol overall with that, and provide a valuable experience for the users as well, which will I think be great for the Terra ecosystem going forward.
Nice, love to hear that. So in a nutshell, Anchor Protocol cross-chain, and then probably opening up the gates for a lot more collateral coming in. I love it. It’s super cool. Any other alpha that you guys want to share? I mean, it seems that you’re on a roll of sharing alpha. I don’t know.
I don’t want to drop too much, right. [chuckle] No, and again, it’s not… I just want to be clear, and it seems like a lot of the community thinks that it’s just the Anchor team that’s responsible for Anchor and I say this every call, right? No, that’s really not the case. Sure, we have some developers that are key in the trenches, but they’re building stuff out that’s voted on, and all these things have to go to vote, and we need to do a better job as the Anchor team in engaging the community. I’m doing my best to try to do, that as part of why we’re having these AMAs and trying to be more transparent and trying to really let the community know that they hold a lot of voting power if they come together collectively. To reach a quorum, it doesn’t take that much of a vote, right? Several big community stakeholders could easily get a vote through quorum in, so getting an idea together on the forum and addressing that, and passing it, I think is really key for everyone to understand.
That’s a good point, Nate, I don’t… So I mean, we anyway talk on Telegram, I always enjoy kind of when I have questions I know I can come to you. And you’re just right now mentioning again, the forum. For example, I see also here, Ryan, of course, as a listener. So GT Capital is trying to push a lot of things also an agora, the same people can do an Anchor Protocol, right. And I don’t know if you can quickly give some insights of why this AMA seems to be pretty early for US people. Last time, it was pretty early for me in the morning. But I don’t know if you want to give some insights of how you’re trying to structure this as me just here as a facilitator on the other side, right, so that people do not think that it’s now always in the middle of the night for them. Right?
Exactly. We’re we’re trying our best here as a community, and we listen and we woke danku up at three in the morning, he’s got important things to do, he’s a key community leader. But we want to try to hit all timezones. So yeah, this is a bit early for me. I’m on the East Coast, this is even earlier for Zion. But we’re we’re doing this because we want to really be as transparent as possible. And it seems like a lot of people that are on Twitter, unfortunately, as much as I push, there’s not a lot of people in the forum. So we’re just trying to hit all these avenues to mine all the ideas that we can possibly mine. Because really, the Anchor team, which we’ve got some cool news to drop on that in a little bit too, while it’s growing, we still rely heavily on ideas from the community. Because ultimately, that’s again, like what I said, that’s what passes vote and that’s what then we build.
Got it. And before I ask of course, the typical question that will be anyway asked late in the AMA. So to give you a segue, Nate, I’m already preparing you, that we’re having Sha in here. I don’t know if you, Sha, would like to give a little bit of an insight how you as a validator see all this discussion also with the collateral. I don’t have no clue how the life of a validator truly is, right. It’s this kind of relevant if you hear this whole cross-chain things, do you see it as an opportunity for yourself as a validator? I don’t know if you can share stuff, because also bLUNA right itself is relevant for validators.
Yeah, well, the two cents that I have is probably a little bit less relevant as a validator, more as just like a heavy Terra ecosystem user. But I think people underestimate how, how much of a barrier there is, I think, for people to move cross-chain to some degree. I mean, I think a lot of us on this call are probably farming on multiple chains. And we don’t think that much of it. But for me, most of my capital is on Terra, right? I’ve just had this tremendous amount of portfolio increase because of LUNA’s price action over this year. And I think about my activity, and I’m pretty lazy about moving that capital to other chains when there’s a lot of opportunities on Terra. And I’m sure it’s the same for a lot of ETH people, especially they’re kind of born and raised in the ETH ecosystem. And so I think that step towards really kind of bringing it to their front door, making it super easy for them, is pretty profound. So I kind of praise the Anchor team for kind of moving in that direction, because I think that is going to bring a lot of capital and a lot of interest into Anchor. I don’t know about… Yeah, from the validator’s side, I don’t know if there’s a whole lot of fascinating insight, but I’m really excited about reaching out to my ETH friends, once they don’t have to do much. It’s like Uber Eats, right? If you don’t have to work that hard for it, people will order it, people use it if it comes to them.
Yeah, but don’t undermine your position, right. I think you as a validator are often forgotten in terms of you are key for all of this kind of working, right. So that’s why I think it’s great that you’re anywhere else as a community validator, I don’t know, if you’re like yourself this term, it’s important, right, that you also give this visibility and that you can share your insights here. Because let’s be honest, without you, nothing would be working here. [chuckle]
You’re too kind. I just love that Anchor is doing these AMAs. I mean, this is the kind of thing that I think… We have a lot of Twitter Spaces on crypto Twitter, and I think it’s great and a lot of… Cephii and LUNAomics, and some fantastic groupthink on Twitter. But I think having the team come out, be available for questions, I think that Anchor is setting a standard for Terra apps that I really like. I love that direction and like Nate said, I mean, I think it’s fascinating. I don’t know if a lot of people realize, but Ozone came out of discussions that Nate had with Do Kwan on one of the forums. And that’s such a huge product, right, that’s just getting ready to launch right now. And so I would have to just emphasize what Nate’s saying, which is just, we need more of the Terra community active on Agora in these discussions where these ideas really can pop up and flourish.
100%. 100%. Yeah, and I think, thank you for reminding me. [chuckle] I’ve sometimes forget that that’s exactly how it happened, right? And that’s the key thing that most people on the forums currently are like, “Come on, Anchor, do something, do something,” as if we hold the silver key to unlock all of this. And no, it’s not. That’s not it at all. Yes, we build things, but we need the ideas and the community around it. And if you have a great idea, it will get passed, right? That’s a thing, and you have to do the work, right? I didn’t just… To be clear, I didn’t just post an idea on the forum and leave it there. I enhanced that idea, I listened to people from the community, I integrated their ideas in right. And then we got Do Kwon involved, he got some ideas, we got part of the bigger community. It was a long process. This is what decentralization is, this is not five bankers sitting in a room deciding what they’re gonna do. This takes more time. Decentralization takes more time. But that’s the beautiful thing is that we get this cross pollination of ideas that build better products that are more resilient.
Absolutely, yeah. Nate, I wanted to ask you a quick question about Ozone, actually, if you had any insight here that you could provide, because I went on to ozone.riskharbor.com to try and protect some of the UST that I have on Anchor. And I noticed that they had only roughly 10 million UST that they could… Well, they had about 8.8 million aUST that they could protect. And there’s no more available aUST to protect through Ozone. It’s kind of like the MIM-UST strategy in that regard, it’s only available up to a certain amount. And I was curious if you knew at all, when Ozone or if they were planning on adding any more available aUST to protect through that program?
I’m actually not in touch with the Risk Harbor team. There’s a different part of TfL core, I believe, that’s kind of working on that with them. It’s independent, which is good, right? This is independent of Anchor now, which is really, really important. Building it natively as part of the protocol probably wasn’t one of the best ideas. So I believe, and I don’t want to state wrongly, so I can’t say too much, but I believe yes, and I believe the rates are going to be coming down as well. But I will look into that, and I’ll make a post on the forum in the coming days if I can get an answer to that.
Awesome. Yeah, no, we can also bring it up in future Twitter Spaces. Just to let everyone know we’re gonna do these Twitter Spaces pretty regularly and switch up the timezones. Obviously, this one’s early in the morning for me in the States, but good for people and other time zones. And we’ll be doing another one next week as well, so stay tuned for an update on that as well.
If it’s okay, for you guys, Zion and also Nate, I think it’s maybe the time now to also open a little bit kind of right now the floodgates in terms of questions. And I know 100% there will be one question… I don’t know if I would ask it or if you, Nate, want to actively tackle it. Because in the end will be repeated over and over again, which I think is a fair question by… And everything you just explained earlier is tackling that topic, right?
Yeah, exactly. And we want to be constructive here. It seems like we’re in a bit of a loop of talking about the same thing in the community. And I think even internally at Anchor, we might have got caught up in it a little bit too. And just hyper focusing on the yield reserve isn’t the best protocol in my mind. But we can’t underscore that this is a huge issue that needs to be looked at. And so, there’s different projections out there that we’ve got four or five months left in the yield reserve. And that’s assuming that everything stays static, right, and that the community doesn’t organize, and that we don’t build out cross-chain Anchor on more than just Ethereum, that we don’t move to Polygon, that we don’t move to Avax at lightspeed. We hired, I think it’s six more people just in the last two weeks. So we’re serious about this. This is something that is going to… We’re going to start moving at lightspeed. Anchor was moving as… In full transparency, we were just moving too slow. And the hiring process took some time, but now that we’ve got that solved, we’re moving at lightspeed to get these things done, and that alone will help get the yield reserve going back up. And I think that, in my opinion, it’s not prudent to just cap things on the Earn side right away until we really know what true borrow demand looks like. We’re still stuck just in the Terra ecosystem while…
So I think, maybe quickly from my side before we give it here to Joseph, and then also afterwards to Lorenzo, it’s kind of… You said it, Nate, right. I think the questions are fair. And what I understood from your side, Nate, is that if people really want to have maybe ideas, I think there are a ton of ideas out there, they should go into the forum and engage right with the community, because there’s the way also to get your ideas out there, right. I think everybody is a bit nervous. Yesterday, I can share with all of you guys, I’ve talked with some friends in the German community. And somebody said, as you said, Nate, so four to five months the yield reserve is still kind of holding up. And I said, “Well remember, Anchor Protocol is 10 months old, so half of it’s time life would still be fine,” [chuckle] which I thought was wild in that terms, but the forum is the right place right, Nate, to maybe come up with some ideas, right.
I think we may have lost Nate briefly here.
We’ll see if we can get him back up here in a second.
Maybe we can get just Joseph… Oh, wait, Zion go ahead, if you want to reflect on that.
Yeah, I was just gonna say, I mean, I can take some questions while we wait for Nate to come back. But yeah, I think in terms of the yield reserve, I think, obviously, it’s an important consideration. But the important thing to realize, as well, and kind of like Nate was highlighting earlier, it’s really all about… This is all about the utilization ratio, it’s about borrowing demand versus deposit demand. And we also have to realize that with massive growth comes growing pains, right. And Anchor Protocol has been experiencing some of the most rapid growth that I’ve ever seen for a protocol. I mean, as you just mentioned, danku, Anchor started in 2021 in March, or May, whenever it was, and it’s already over $10 billion in TVL. And that’s a massive accomplishment for Anchor. And it’s a massive accomplishment for the Terra community as well, obviously, it’s a community led initiative. And with that, obviously, comes challenges when you experience rapid growth. And I think right now, with cross-chain Anchor, I think it’s very clear that if we can implement that within the next few months, I think that that’s going to increase the borrowing demand significantly, and the yield reserve will stabilize very quickly. And the TVL will continue to climb for Anchor and we’ll be seeing a very healthy Anchor even more so than we are today in the coming months.
Got it. So I would say let’s give it to Joseph and then to Lorenzo. Joseph, can you speak?
Hey, hi, can you hear me?
Yes, ser. Go ahead.
Alright, fantastic. Anyway, hi, from sunny Singapore. First off, thank you so much to you and your team. I think you guys are doing something fantastic. And there’s a lot of potential for this project. And yeah, thanks for taking time off for this AMA as well. So I think my question is, how does your team plan to keep the ANC token buoyant? I understand that there’s some buybacks taken from the reserve and I think, more than that, I don’t really see a reason why investors are holding the token besides the voting rights, and perhaps for the LP gains. Because other than that, it does seem like they’re only facing selling pressure, especially from those getting ANC purely from these borrowing incentives.
Yeah, 100%. I think that there’s issues that we can look at. If more collateral comes on board, there’s going to be more buybacks, which put more buying pressure on the token. So we do have to see if the mechanism works properly. Currently the borrowers aren’t where they need to be for the price of the ANC token to reach the stability that the original model is made for. That said, I think there’s other areas that we can be looking at. One of those is what’s been talked about in the community right now, which is the ANC… Increasing the rate at which earners get by holding Anchor. That’s just one area and obviously, there’s a lot of other things that we could start looking at as well. But again, I think seeing where the collateral is and how that then affects the buybacks, staking rate, and the demand for holding it. Because think about it, as more buybacks come in, the actual staking rate goes up.
Can I ask a question? Oh, go ahead, Joseph. No, go ahead.
So sorry. So exactly, I mean, with LUNA, if the staking rate drops even further, that will affect the reserve as well. And even if we do reward borrowers with more Anchor tokens, it doesn’t change the fact that the token itself will be a lot more inflationary in this case. And also, I mean, this is… I mean, talking about, let’s say, five years down the road, where you guys successfully managed to plug in all the cross-chain and all the different assets from the different chains. But even then, I still don’t see a case where the token can be kept, buoyant.
So there’s other things to be looked at, too. You said something about LUNA, I think you meant Anchor. Did you mean this staking rate of LUNA? Or did you mean the staking rate rate of Anchor?
Oh, no, I meant the staking rate of LUNA. I understand that you guys take the collateral and you guys stake it as well. So what happens when the staking rate of the collateral itself drops?
Gotcha. Yeah. And that’s why we’re diverse. That’s why the community has voted to add more collateral tokens, right. There’s the ability to start adding a lot more. And I think this is key in the future, as we come together as a community and decide how to look at simplifying onboarding new assets, because that’s a bottleneck right now. And if you’ve got inflationary tokens, like ATOM and some of the other things like Osmosis added, you’ve got a higher staking rate on those coins that can buffer. You create a diversification of staking returns so that you don’t have one coin that can predominantly lower the whole yield reserve buffer that’s coming in. And then to circle back, there’s other things that need to be done with the token that I think we can get ideas out there, I’ll just throw that one out there. And this isn’t a new idea, is really creating a burn mechanism based on velocity. And Flipside’s actually got bounties out there trying to measure this right now and look at it. But their idea is to measure that emissions and create a burn mechanism based on a velocity ratio. So therefore, you’re calibrating the missions based on what people are selling. Therefore, if more people are selling the token, then you burn more of it that way. You also incentivize people not to do that.
One follow up question, Nate. I think that question from Joseph is great. Also, in terms of the Anchor token prices, because two things were mentioned there. First of all, kind of the inflationary aspect of Anchor, which I think is not given, right. So from March 17, the whole inflation rate from Anchor drops from 216% to I think around 58%, I need to open the docs. Because then stuff like the LP rewards, turn away. Other stuff are just reduced. What got me pretty interested because Joseph also mentioned in terms of token do something, right. But it is governance, right, which I am probably more bullish than a lot of other people, because I’m also following the Curve Wars, right? Where in the end Anchor is essential for the whole Terra ecosystem. So the moment in four years where there is no Anchor token, and somebody just have the true governance power, he can do whatever he wants with Anchor in the end, right, if he would really have 51% of the voting power. Is there any concerns or discussions internally about kind of this Curve Wars, which could become an Anchor War long term? Just curious, right? Maybe not.
We may have lost him.
No. Maybe you would like to take it and then we go on with Hutch.
No, I can take it. Yeah, I think it’s a very relevant question to have, because Anchor is the big protocol on Terra, right? The success of Anchor is very important for the success of Terra, right, the whole entire chain… Oh, Nate’s back here we go.
Little bit of that. [chuckle] What were you saying there, danku? About…
TL;DR is basically Curve Wars on Anchor because of the Anchor token because right, it’s not inflationary in the two years Anchor is over. And I always kind of in my head is like saying governance is not relevant, it’s. We see what on Ethereum is ready and running. And I would be interested if in the team, kind of Curve Wars discussion for Anchor are already kind of taken into consideration.
And I think no, honestly. We’re focused on solving the borrowing issue right now. And then once the borrow issue’s saved, we move on to some other things. We’ve got time on the ANC token to really work on figuring that out.
I’m holding my ANC token to for sure not get into war mode. As Zion said, the 20%. They probably should stay out there. Or, Sha, you want to go into war with me? How do you see that?
I don’t want to go to war with you. I hear Germans are really good at war, so I’m gonna stay away. [chuckle]
I’m not German, dude. I understand. I don’t know about war, though.
Are you Spanish? Really? No way?
Yeah. No worries. I’m European. That’s fine. We are all crypto guys. [chuckle]
Nate, I got a follow up. You mentioned the boost idea, or the Anchor boost idea? Can you give us a little bit more information about kind of how that idea is developing, a word on that if there is anything to give us at this point?
Mostly everything on that’s on the forums, this is mostly a community bootstrapped idea. Yeah, really, the idea is simple. I guess that’s not right. It’s not simple. That’s why it’s hard to do. So I guess I’ll get a little technical really quick. One thing about timestamps and boosts is like figuring out when people deposited and remove. So A, you either have to create a secondary type of vault for the boost, which then affects fungibility of aUST which we wouldn’t want. So that’s one option. Or the other option is if you want to keep fungibility, you’ve got to redesign the the aUST mechanism, like I talked about before, which has to be done very carefully, because it opens up more attack vectors due to the complexity of it. So I think the idea though, the simple idea built on top would be really the idea of, if you deposit aUST, you have to own one, whatever percent the community decides of Anchor to get that time-based boost, again, another governance parameter that would have to be created by the community, whether it’s 30, 60, 90 days. And then that would affect the actual underlying rate. So whatever you needed to boost, that would lower the base rate. That was kind of the idea I see evolving.
I see. ‘Cause I was wondering about this idea. And I think people have brought this up on Twitter, I see them kind of… It popped up here and there. And I didn’t realize that it is… It does seem quite complex and not an easy thing to kind of just turn some switch on to add a boost. Thanks for clearing that up.
There is a guy who probably didn’t went to sleep yet, because I just talked to him earlier. So before he just keeps on an all nighter, Hutch, can you hear us?
I heard there was this call, so I just had to stay up. It had nothing to do with me managing my loan. [chuckle] Anyway, guys, great work. And yeah, thanks that alpha is strong. I’m really looking forward to that. My question deals directly with that. Last time I brought up maybe having some kind of fields or toggle or prioritization, when there’s multiple assets to be able to choose which ones you want liquidated first. So part A of my question is, could there be that on the new interface? And then part B is, is the collateral ratio going to be adjusted based on staking yields for the different assets? So like SOL is different form ETH, different from LUNA, different from… If you guys are doing DOT or ATOM, if people post certain assets will it have a different LTV according to how juicy the staking yields are for the protocol? Thanks.
So, again, that would have to be a new governance parameter that would have to be set up. Currently that’s not how it’s set up. I’ve been thinking about these things.
Did that go through?
You went through, Hutch. Nate was answering it. You might not be able to hear Nate.
Can you guys hear me?
And we hear you, but I don’t think Hutch can, though. Maybe he lost his phone in bed while just getting ready.
Twitter’s got to really fix this. It’s pretty bad on the Android side. Anyway, yes. Have a good governance parameter, I do think would be prudent to start looking at how that works. Because yeah, currently, ETH deposits are subsidized by LUNA staking rewards and long term, I don’t necessarily think that that’s sustainable. But again, it adds complexities to the mechanism and I think that’s why it wasn’t addressed right away. A, get as many new collateral assets as you humanly possibly can on right now, and then start looking at how we fine tune that.
Cool. I think Hutch is within the listeners, and he’s putting a 100. So thank you, Mr. Hutch and hopefully good night whenever that comes. We have Meuenglish as the next speaker.
Hello, can you hear me?
I was just wondering, while paying the later… So I know…
It’s very tough to… So we hear you, but it’s like you’re underwater. And we have background noise. So I don’t know if you can move a bit?
Oh, yeah. How about now?
A little bit better, yeah.
All right. So I was just wondering about the insurance. I know it could be on a different topic, but the insurance side of it there. Putting in more Anchor there. Still a bit wary about insurers. Just go in there, click on the link and just choose any one of the insurers. And then we get about 17% is that correct?
So it’s about the insurance pieces and if there’s any benefit of taking one of the different ones?
Yeah, I think, from an insurance perspective, Ozone is probably the best bet. And this kind of comes up with the question that I had for Nate earlier, and it really has to do with Ozone increasing the amount of protected aUST that they have, because right now they have 8.81 million aUST that you can protect through them. But it doesn’t show up. So just so people know, Ozone doesn’t show up under the Protect Your Deposit button on Anchor Protocol. And maybe that’s something that should be added in there, but you can see that it’s broken up by UST peg or smart contract insurance. And, obviously those are two different types of insurance. So if you’re worried that the UST stable coin is not going to maintain its peg or there’s going to be some instability there down the line, and it’s going to sustain for a long enough period of time that’s going to cause you to experience some issues, then you’d want to get the UST peg insurance. But if you’re more concerned about protecting against smart contract problems, then you’d want to go with one of those other ones. And in terms of which one to go with, I can’t actually really advise on that, because I personally don’t have any insurance. I’m like full degen mode on my Anchor deposits. And so I don’t know if Nate has any insight there into Nexus Mutual, InsurAce, or Bridge Mutual?
No, I can’t really advise on that. Really, that’s up to the user to kind of do their due diligence.
I hope that answered your question meandyou. I mean, just from a retail perspective, I also understand why the Anchor guys also cannot go too much into details. You need to make, as Zion said, a decision between UST depeg risk and also smart contract risk. That’s the first step you need to take. I personally see UST depeg, probably as the more stronger one. But that’s up to you. And then I would do on your side to research in which platform kind of gives you the best insight of how it works in the background to generate yield to cover that all, and how it makes decision in terms of yes, we pay or no, right. That’s the two things I think that are important to take into consideration.
Okay, that’s great. Thanks very much for that. I appreciate that.
Thank you, ser. I think Mr. Nate dropped out in the meantime. And we had some other people that were lined here, but they also dropped out probably even topics of Twitter Spaces. I hope Zion and Sha, that you’re still with me, because we are the stable part here, right. [chuckle]
Yeah. Well, one thing that I think is interesting is I think… And this is, I don’t know, if it’s necessarily a question for the Anchor team, but I think Ozone… I feel like Ozone kind of quietly, not quietly, but they made this announcement that Ozone is available. And my understanding was that most of it filled up within the first 24 hours. And then I feel like, we haven’t really talked about it much as a community. And maybe that’s something that deserves an AMA to talk to the Risk Harbor team, and kind of see what their long term plans are. Because I think they talked about opening some more stuff up and making some more changes in March, and that this was kind of a preliminary thing. But do you guys… I don’t know if dunku are, or Zion, or Nate, do you guys know more about that?
I wish I knew every single thing that was happening. [chuckle] That’s just kind of, I guess, proof of why this is truly decentralized, right. It’s like, there are certain things that are being worked on and yes, we’re in contact with Ozone, but I’m not directly in contact. Even though it was my idea to begin with. So I have it on a list of things, I think…
Shame on you, Nate.
I have a list. I’m gonna dive deeper because I’ve been curious myself what’s actually going on there. So I’ll research that. Try to get in touch with the team and we’ll have answers.
Not to put it all on your shoulders. Maybe Orbital Command will try to reach out to them and see if we can get an AMA going with them too. Because I think there’s a lot of interesting questions. And I think the community clearly wants to know more about pros on what’s going on.
I think that’s huge. I think getting in there with Risk Harbor… Because it’s not Ozone, its Risk Harbor that’s actually took over Ozone. It’s the…
Right, right. That’s what I meant risk harbor. Exactly.
We have James next up here.
Hi. Yeah, so I’ve got a couple of things I want to discuss. I’ve been pretty active on the forums about us getting a new security audit. I read the original post, actually. I think, bitN8, I think you were pretty active on this as well, and that’s now being actioned. I was just wondering, is there still plans for Anchor moving towards a continuous audit schedule in the future, similar to Aave? And what’s the team’s views on Anchor smart contract security, particularly if you’re going to be publishing a major revision to the Anchor smart contracts?
We may have lost Nate there again. Seems like he’s doing a good job of like exiting and then coming back in and then fixing the issue. So we’ll see if he can do that again. I don’t have much insight on this one. So I’m gonna have to rely on Nate for this.
I’ve got another question. So about…
Go ahead with the second one, and then we wait until he comes back.
Yeah. So a lot of people are using Ethereum Anchor to interact with Anchor directly through the Ethereum blockchain rather than setting up a wallet on Terra, and yeah, interacting natively with Anchor using UST. I think the reason why a lot of people are doing this, I mean, particularly institutions and maybe large investors, is because there’s really a lack of multisig solution, similar to Gnosis Safe on Terra at the moment. I believe Astroport is currently building one or a similar solution. But until we have that, it’s very difficult for DAOs and those types of organizations that rely on multisig to invest in Anchor at the moment. I was wondering what kind of support there’s going to be for, yeah, for multisigs in the Terra blockchain and also Anchor because that’s definitely a limiting factor. And also for people who are investing using Ethereum Anchor I was wondering whether Ozone insurance protocol is going to be also be on the Ethereum blockchain for people who have wrapped aUST on the Ethereum blockchain.
Nate, are you…
No, he dropped again. That so wild. That poor guy, he’s doing the best that he can. So I mean, I can maybe take it just as a community member, the topic of the multisig, which I think, I agree with you james, it’s just key also for the ecosystem to grow. But if you’re interested in that, I think you can read yesterday, the guys from Apollo DAO released their kind of roadmap and what they’re doing and planning in 2022. And I think we are going to see a major major multisig protocol, or not protocol, kind of functionality pretty soon. They are working on it, I know that. I don’t know how much Alpha I’m able to drop in terms of they call it Apollo Safe. And it’s coming sooner than later, right. So I think that topic will be solved pretty soon on the Terra blockchain as a whole. And if Mr. Nate then is back up, hopefully he can tackle the smart contract and regular audits.
And finally, as well, I’ve been pretty disappointed with the communication from the Anchor team. I really appreciate you guys having an AMA today. But reaching out to individual team members for specific requests and collaboration has been very difficult. I was wondering whether you’re planning on making any improvements to this process and increasing engagement with the community again.
So I’m gonna… I keep dropping on and off let me backpedal real quick to say multisig is really dependent on things like Apollo and Terra Station wallet to get multisig. And as far as the Ozone goes, I really think that we need to get cross-chain… Or get a AMA going with Ozone. The Risk Harbor, which is what it is now. And back to the one other question I missed, which is yes, more audits are in the pipelines right now.
As far as the communication as well, James, I think that will improve now that the Anchor team has hired on some more people. So there’ll be more people to address some of the inbound, because Anchor gets a lot of inbound. And so that’ll be, I think, something that’ll improve in the coming months.
Yeah, my, my organization is building a savings app for Brazil. And it’s going to be called token.com. And we’re going to launch in January, and that uses Anchor to power basically 20% growth, or hopefully somewhere around that number, maybe slightly lower for US dollar deposits for Brazilian natives. So really excited to launch this product. And would be really cool to reach out with the Anchor team and collaborate on some marketing. So we can tell people about this really, really exciting product.
Yeah, would be great if you guys get a forum post up, right. And then yeah, we can get open communication going through that
Obrigado. Amazing. I will reach out to my Brazilian friends and tell them there’s something coming. [chuckle] That’s cool.
Yeah, more on it in the next couple of weeks. And yeah, we’re going to be moving into private beta and public launch.
Very cool. If that’s if that’s okay, for the Anchor guys. Also, because we are running into kind of, what we’re feeling here, more issues with Mr. Nate, kind of actively always clicking on the leave button. We have three more speakers up here. [chuckle] Sorry, Nate. And I think we can just keep with them. And then we call it a day in terms of AMA. So we have next Adviasprotocol. Go ahead.
What are you doing for the boosting of ANC? How would you track when people deposit? Or are you tracking, and then just try to do one they excel in withdrawal through the protocol?
I’m not sure if I caught that.
That was very hard to hear. I think you said something in terms of… Yeah, you sound super far away. But I heard something like if the team is tracking that in terms of how people are interacting with the earned side, right? In and out, is that correct?
Well, so for the boosting for ANC rewards, they get higher APY? How would you track that?
So it’s about… It’s really tough to listen to you. I guess maybe you write to the Anchor team or go on on the forum. Or maybe you can stay with us and try to fix it in the meantime. So it’s very tough to listen to you. Sorry for that, ser. That would be for now the solution, and then we would go ahead with Mr. M. ggie_88. And then we try to fix the topics of Adviasprotocol.
Hey, guys, this is more of a general question for the Anchor team, if I may.
Yeah, go for it.
Good stuff. Yes. The question is just how well do you think 2021 went based on your initial projections at the beginning of the year? And I guess, how bullish are you on 22 based on the current plans you’ve got in the pipeline?
Oh, well, there’s a lot of exciting new developments that, I think, the committee is developing in the Terra ecosystem. And there’s a lot to be excited about 2022 as well, based on some of the things that… Conversations I’ve had with people, so I think 2021 was an amazing year for Terra overall. And hitting the number two smart contract blockchain by TVL was a huge accomplishment. And moving forward into 2022, I think what’s really going to be exciting is seeing some of these new protocols launched like Prism, Mars Protocol, that’s going to make the Terra ecosystem more robust, obviously, with composability. Every time one of these new protocols launches, it makes the entire ecosystem more robust. So that’s kind of what I’m excited about, and there’s a ton in the pipeline for 2022 that I think is going to be discussed somewhat soon.
Brilliant. Thank you.
Thank you, Mr. M. And then we have MaxThera up here.
Hey, guys. Yeah, I just have a few questions, basically really on the sustainability of the Anchor Protocol. I think there’s no doubt that Anchor Protocol is one of the most important protocols within Anchor itself. But I was just wondering whether there’s any plans on putting incentives using the community pool for ANC tokens to incentivize dapps that are on Borrow side, right. From what I know, that there is like, probably nine different dapps out there using the Earn function, but probably just only one on the Borrow function, which is Nexus. Are there any plans from the team itself to really incentivize the Borrow function dapps that’s going to be bringing the revenue to the Anchor Protocol? Thanks.
We got Nate connecting here. And we’ll see if he wants to address that question. Otherwise I can give it a go.
You start, he connects. [chuckle]
So, yeah. So on the borrower side of things, I think right now, the Anchor team, and I think the community is really focused on getting cross-chain Anchor integrated. That’s going to really increase the borrowing demand. As Nate alluded to earlier, from a staff perspective, Anchor is really only tapping into the Terra ecosystem, and the market cap of things like LUNA right? So if we look at Ethereum, Ethereum has got a massive market cap in comparison to LUNA. And we have barely tapped into any of that because of that experience element that we talked about with cross-chain Anchor, right. So once that gets built out, I think that’s really going to increase the borrowing demand on Anchor and we won’t really need to partner with different protocols to add incentives to get people to borrow. Borrowing on Anchor now, today, as it stands, is still a very… It’s probably one of the best borrowing experiences in DeFi. Because of the ANC incentives, making APR right around 1%. And it’s also really simple to use, right? So I think partnering with protocols wouldn’t be a bad idea. But I think right now, the cross-chain Anchor product is probably more efficacious in increasing borrowing demand, than adding incentives.
Right, thanks. And the other question I have was more towards, I think most of the Anchor Borrow APR it’s incentivized through the ANC tokens itself, which result with a net APR of negative maybe one at the moment. But what happens when the ANC token stop given out as incentives? This will make Anchor Protocol pretty non-competitive to the other lending protocols out there. Do you see that there’s going to have a really bad effect to the Borrow side of things as well?
No, I think this is where you have to continually keep evolving and growing Anchor. The staking return that we take as the protocol is key. That’s always going to differentiate it with or without ANC tokens, because that allows a better borrow rate because we’re taking part of those returns. So it’s figuring out how to get more yield collateral on there, exploring LP tokens and things like that, to kind of buffer that and continuing to build more innovative products that have more competitive yield than other lending protocols.
Gotcha. Gotcha. Thanks.
Cool. Thank you. We exactly hit 60 minutes, man, that’s I would say perfection, as perfect as the Anchor rate on Anchor Protocol. [chuckle] Almost, right? It’s working at least, it’s running strongly there at right now 19.5%. Any other alpha that you would like to drop before we close this here? And as I said, I think there will be any way next AMA pretty soon, right?
No more alpha. I think we need to get in touch with Orbital Command and try to do a Risk Harbor AMA if we can. I think that’s pretty crucial. And yeah, look for us next week. We’ll be doing more of an East Coast based ones, unfortunately won’t have our great hosts danku and RyanLion, but we’ll pull in some other East Coast reps and we’ll keep this thing running strong.
Cool. Amazing. Alright, I had a blast. Thank you for all the speakers, thank you for the Anchor guys. Thank you for the patience, Nate, man I know how tough it is if the technical things are not working. Cool. So I would say, see you all soon again and go to the Anchor forum to talk to Nate. Right there you can discuss with him.
Thanks for checking out another episode of The Ether. That was the Anchor AMA Community Call recorded on Thursday, January 6th 2022, at four in the morning for me. That’s okay though, we love you all. For terraspaces.org, I’m Finn. Thanks for listening.