On Thursday, the team behind the lending protocol Anchor announced that a proposal has passed and the decentralized money market will “implement a more sustainable semi-dynamic earn rate.” Following the announcement, the value of the protocol’s native token ANC slipped roughly 2% lower during the last 24 hours.
Anchor Protocol Is Changing the Application’s Earn Rate
Anchor Protocol, the decentralized finance (defi) money market and lending application built on Terra, is making some changes to its earn rate. According to a recently passed governance vote, Anchor Protocol will dynamically adjust payout rates. The earn rate can increase or decrease per period to 1.5% spending on the increase and decreases in yield reserves. The Anchor governance vote’s outcome shows 14.98% voted “yes” to the proposal, while 2.4% voted “no.” Furthermore, Anchor’s official Twitter account tweeted about the proposal passing on Thursday. “With the passing of Prop 20, Anchor will now implement a more sustainable semi-dynamic earn rate,” the team detailed. The Anchor team added:In its simplest form, this proposal involves two parameters on the Earn side and we will break down each one: 1. Frequency – How often the rate can change, [and] 2. Cap on Rate Adjustments – How large the rate changes can be.According to the thread, the protocol’s payout rate will adjust the frequency once a month and the adjustment will be based on yield reserve performance for that month. “The cap on rate adjustments is set at 1.5%, so the most it can increase or decrease each month is 1.5%,” Anchor’s Twitter thread details. “The rate adjustments will be positive or negative depending on if the yield reserve appreciated or depreciated that month.”
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