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Anchor Protocol (ANC) token price has surged in the past 24 hours, sidestepping a plunge in the crypto market as traders sought exposure to the relatively large yield offered by the Anchor protocol. The token was last trading up 13% at $5.5, hovering around 10-month highs and with a total market capital of $1.4 billion.

Anchor offers a 20% yield

ANC is a part of the Anchor project, a decentralized lending protocol built by the developers of Terra (LUNA). The project offers depositors of stablecoin TerraUSD (UST) a 20% annual yield, which is among the highest rates in conventional stablecoins.

By comparison, yields on top stablecoins including Tether, USD Coin and Binance USD go up to 12%.

It is likely this 20% yield that has attracted traders, amid surging volatility in the crypto market. ANC tokens are issued as incentives for depositing on Anchor, while the protocol burns ANC regularly to support its price. LUNA, another token that is linked to UST, has also surged 79% in the last 30 days.

Stablecoins also commanded the largest trading volumes among their peers through February, as tensions over Russia and Ukraine sent investors into safe-haven assets.ADVERTISEMENTFind Next Crypto Gem on KuCoin! Sign up to Claim $500 Welcome Bonus.

Binance Launchpool, LUNA fundraise support Anchor

In late-January, ANC token was added to Binance Launchpool, through which traders could earn ANC by staking BNB, LUNA and BUSD tokens for a 21-day lock-in period. The move was a turning point for ANC, with the token having surged a whopping 255% from record lows since then.

More recently, the Luna Foundation Guard, a Terra-affiliated community, closed a $1 billion private token sale to establish a Bitcoin-denominated reserve for UST. The move adds further credence to UST’s stablecoin status, and is likely to keep Anchor yields elevated.

Reports suggested that Luna was planning to further bolster UST reserves through another sale.

The Anchor community also recently proposed to shift to a semi-dynamic yield to keep up with increased borrowing demand in the protocol.

Source: coingape.com

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