Summary: Seek authority from the community to whitelist Anchor Protocol for depositing of UST.

Background: Recently the DAO has been accumulating UST through bonds. The framework and guidance for treasury exposure to UST was outlined in OIP-52 - Add UST to the Treasury. The DAO is now seeking the ability to deposit idle UST in Anchor to further increase the backing of OHM and to support the Terra ecosystem.

Olympus will receive newly minted Anchor Terra (aTerra) in exchange for their deposit. aTerra tokens represent Olympus’ share in the stablecoin pool and can later be redeemed to claim the initial stablecoin deposit, along with accrued interest and subsidies, see: https://app.anchorprotocol.com.

Motivation: Whitelisting Anchor Protocol will allow Olympus to earn a fixed rate return on providing collateral to the UST Stablecoin Market.

Description from docs.anchorprotocol.com: Anchor is a decentralized savings protocol offering low-volatile yields on Terra stablecoin deposits. The Anchor rate is powered by a diversified stream of staking rewards from major proof-of-stake blockchains, and therefore can be expected to be much more stable than money market interest rates.  The Anchor community believes that a stable, reliable source of yield in Anchor has the opportunity to become the reference interest rate in crypto.

Risks: UST is a non-native asset to ETH L1, the DAO will be providing collateral to a stablecoin market and Anchor holds the majority of UST supply however Olympus will only provide a small percentage in comparison to total excess reserves which coincides with low risk per the DAO risk analysis.

Protocol Analysis: Using a risk analysis framework developed by the DAO, the Policy and Partnerships teams have attempted to score various protocols based on some subjective and non-subjective data. Anchor scored a 3. This is due to inherent risks associated with the asset itself, UST, allocation of excess reserves and the functionality of the protocol. The subjective value was derived from a combination of quantitative and qualitative.

The following risk analysis shows the outcome of the Treasury Team's holistic assessment of the proposed platform and intended strategies. Lastly, one final reminder that this score is an average that was derived from an generalized assessment of the platform which includes TVL, audits, protocol age/risk, targeted investment and strategy type.

Risk Analysis_Anchor Protocol

Seek approval to whitelist Anchor Protocol.

This poll has ended.

" Anchor scored a 3"
a 3 out of what? 🙂 10? 5? 3?

  • json replied to this.

    Makes pretty good sense to me

    Isn't the wrapped staked UST called aUST, not aTerra? The risk analysis also says it operates on Ethereum, but it runs on the Terra blockchain. Is there something I'm missing here?

      HackerLaddy I haven't heard of aTerra before either, I'm guessing @json you mean aUST?

      When you deposit into Anchor EARN you receive aUST tokens in exchange for the UST while it's being provided.

      I've tracked the interest earned over the last few months and it's usually somewhere in the low to mid 19% APY range

      • json replied to this.

        this is a no brainer đź‘Ť

        Do you plan to bridge back the UST to terra to stake in anchor?
        how will the funds be custodial on the terra blockchain??

        • json replied to this.
        • Ran likes this.

          the ust protocol holds are not much actually..

          only 4m ust, but the collaboration between olympus and anchor is becoming interesting

          • json replied to this.

            HackerLaddy need more detail about the whitelist…
            what is aTerra, how does this work on Ethereum

            • json replied to this.

              Ran That's just how the protocol sees the deposit but it's redeemable for UST at a later date.

                Coud No, keep it on mainnet for now

                Holding UST without staking it on anchor, is like holding OHM and not staking it.. 19+% APY lets go

                json In other words, you're saying it's low risk, correct?

                • json replied to this.

                  json Do you mean that we don't need to bridge the UST to Terra and deposit it Anchor? If not, how is that possible? Can you explain?

                  • json replied to this.

                    No, my question is, if the proposal passes, those UST will be bridged into Terra then deposit it to Anchor Protocol? If so, what is the aTerra for? Thanks!