Guided by a belief that decentralized finance (DeFi) is still missing “a simple and convenient savings product,” South Korea-based stablecoin issuer Terra (LUNA) has revealed Anchor, a new DeFi project.
The new platform will be governed by a newly formed organization the Interchain Asset Association, consisting of individuals associated with Terra, as well as blockchain platforms Cosmos Network (ATOM) and Polkadot (DOT).
Speaking in a livestream for the Unitize online conference yesterday, Terra CEO Do Kwon revealed the new blockchain platform, which promises to pay savers what is described as a “dependable APR” (annual percentage yield) on their stablecoin deposits.
3/ @jackbplatts on the potential of staking derivatives: you CAN keep your tokens staked and get liquidity quickly,… https://t.co/M7mS1cnwBV
— Terra (@terra_money)
According to the company, the system works by users depositing stablecoin onto Anchor’s smart contract, which then uses those funds to establish staking positions in various compatible proof-of-stake (PoS) stablecoins.
“To generate yield, Anchor lends out deposits to borrowers who put down liquid-staked PoS assets from major blockchains as collateral,” the announcement said, adding that this ensures