Terraform labs now appears to be in a soup and literally failed to manage the trembled situation. And hence Anchor Protocol steps in proposing the interest rate cut to stabalize the LUNA & UST prices. Taking into consideration the long-term stability of the crypto-assets, Anchor proposes to cut the UST yields to 4% from the current 19.5%. While the Terra ecosystem struggles very hard to maintain UST’s peg with the USD.
The proposal offers to decrease the interest rates to 3.5% and maximum deposit rates to 5.5% with targeted interest rates of 4%. Anchor Protocol is a borrowing and lending platform built on Terra blockchain and offers loans against their deposits and yields on their UST deposits. However, many experts previously had said that the high-interest rates offered by the platform for UST deposits are very tough to sustain. As huge liquidity is required to maintain the rates.
Anchor Protocol maintained its significant strength and hold a strong base within the DeFi space. But the recent turmoil caused by the LUNA & UST price has caused huge turbulence within the crypto space as well as the working of the Anchor protocol. Now when the LUNA price is an inch close to getting rugged pulled, it would be interesting to watch whether this move could help out both the distressed tokens!
Is There Any Hope for Terra(LUNA) Price
Terra’s price has crashed below its knees and it’s discovering a new low every single minute. After hitting a 3-digit figure, the price has added up multiple zero’s in its value that currently, LUNA price is appearing much similar to SHIB price. And if the new LUNA tokens keep on minting, then it would be nearly impossible to re-induce a bullish momentum.
On the other hand, UST’s peg is slipping constantly and reached below 20 cents by slashing more than 76% at the press time. And hence until and unless UST regains its peg, nothing positive may be expected from both of the assets.
And on the other hand, LUNA’s trading volume has spiked by more than 41,000% with more than 2978.63 billion tokens in circulation. Therefore, one cannot expect the situation to be stabilized for the next couple of months.