Foresight & Kash: The Collapse of Algorithmic Stablecoins? An In-depth Look at Anchor Protocol

The fall of Terra and Anchor

UST has completely de-pegged from the US dollar, falling to $0.03 in the last 24 hours, as Terra faces an overwhelming loss of confidence. Luna is now worth $0.00012, down from $60. And as the largest project on Terra by far, Anchor Protocol played a significant role in both Terra’s rise and its downfall.

How does Anchor work?

In essence, Anchor Protocol is a lending & borrowing protocol. On the one hand, it attracts deposits by paying depositors a high APY (19.5% for most of its history). On the other hand, Anchor lends out these deposits, and the borrower is required to provide collateralized assets (LTV ~ 60%-80%) and then pay interest on the loan to Anchor protocol. Upon receipt of the borrower’s collateralized assets, Anchor will stake these assets to generate staking yield.

About Foresight Ventures

Foresight Ventures believes crypto will define the next few decades of innovation. The fund invests early and makes decisions quickly, providing wide-ranging support for projects from its robust ecosystem that includes major market players crypto exchange Bitget, and crypto wallet BitKeep. Its founding and partnership team includes veterans of some of the top financial and technology firms dedicated to sourcing and supporting the next generation of disruptive innovations across Web3.

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Foresight Ventures

Foresight Ventures

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Foresight Ventures is a blockchain technology-focused investment firm, focusing on identifying disruptive innovation opportunities that will change the industry