A Guide to Anchor Protocol for New Crypto Enthusiasts

Anchor is an exciting protocol on the Terra blockchain designed to help investors stake Terra stablecoin. Once you save, you will enjoy returns with low volatility that are directly proportional to your savings. Anchor Protocol gives stable savings to both new and experienced crypto enthusiasts, which is why it has gained popularity very fast. 

If you are new and interested in Anchor Protocol, you first need to know more about this platform, and the good news is that you are in the right place. So, let’s dive into the important insights to help you make the right decisions. 

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Overview of Anchor Protocol

Anchor Protocol operates under the decentralized finance (DeFi) concept where no one controls the investors’ money alone. There is no one specific person to benefit from the savings people make. Rather, any proceeds are subdivided among the investors. 

The ecosystem of the Anchor Protocol is dynamic and has a number of important contributors:

  • Lender (depositor) – This is you as the investor, the person who saves Terra Stablecoins which are then lent to crypto borrowers. The finances are pooled together under the DeFi Finance pools. The borrowers return the crypto with interest, which is distributed to the investors.
  • Borrower – This is the person who borrows crypto from Anchor Protocol pools. Even as an investor, this is one of the benefits you enjoy since you can borrow against your savings as collateral. And this is why Anchor Protocol has been a great opportunity for many new crypto enthusiasts who want to grow. 
  • Liquidity providers – There are entities that provide ANC liquidity to Terraswap and other projects. They are equally important because they ensure the smooth running of projects that support the ecosystem.
  • Buy solana on Uphold transaction fees are paid in SOL and burnt (or permanently destroyed) as a deflationary mechanism to reduce the total supply and thereby maintain a healthy SOL price.

Getting Started with Anchor Protocol

Anchor Protocol platform is available on their official website and other reliable crypto market platform such as Loop finance. Just like any other platform, you will need to register to get an account. Once you are signed in, you will access the saving feature. As mentioned, investors deposit Terra stablecoins to get started.

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They can earn up to a consistent 20% on their savings. The main benefit is the interest you earn for your saving. It is low volatility because it is yielded by stablecoins with low risks. The good thing is that it increases as you save more Terra coins. 

There are many other opportunities on the platform such as qualifying for airdrops and the ability to borrow crypto, which is on another side of Anchor Protocol.

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Risks Involved Anchor Protocol

Is it worth mentioning the risks involved when you engage Anchor Protocol? As a new crypto enthusiast, it is vital to calculate the risks, especially during this time of coronavirus. All crypto investments are volatile to some extent. Even if Anchor Protocol stablecoins are low volatility, you need to be prepared for anything. 

There is also the risk of malicious infiltration of investors’ accounts by hackers. Even though Anchor Protocol has tough security measures, you never know what will happen. So, take all necessary precautions. 

With all of these insights about the Anchor Protocol, you are in a position to make the right decision even if you are new to crypto investment. This is your biggest opportunity for this. 

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