Jan 27
Terra U | Anchor Protocol Lesson 2: Step-by-Step Walkthrough
In this lesson we walk you through how to save and take out loans on Anchor Protocol.
Savings:
Anchor allows you to earn a stable 19.5% yield on your UST deposits. There are two main ways to access this. The first is using the Terra Station https://station.terra.money/.
Method 1: Terra Station
In your Terra Station app, click Wallet in the top left. You will see ANCHOR EARN in the bottom right of your screen. Click earn.
This takes you to the Anchor Earn screen. From here simply select the amount of UST you want to deposit, type in your password, and click submit.
Give the protocol a few seconds to process your transaction, and then you are all done! Your funds are deposited and earning interest. You should see a success confirmation message.
Method 2: Anchor Web App
The other main method to use Anchor savings is through the Anchor Web App https://app.anchorprotocol.com/
Once you open the Anchor Web App, head to the Earn page. You can select this in the tab at the top of the screen. Click Deposit.
In the pop-up display that appears, type in the amount of UST you want to deposit. Then click Proceed.
You will be given the option to Deny or Post the transaction. Choose Post.
After a few seconds your transaction will process and your deposit will be complete! You should see a completion confirmation message appear.
Now on the Anchor Earn page you will be able to see the total value of your deposit in the top left. You will see your expected annual interest just below this, and the interest rate you are earning on the right.
Borrowing:
The easiest way to borrow on Anchor is head to the web app https://app.anchorprotocol.com/
First we need to prepare our assets to provide as collateral for the loan. We can use either Luna or ETH (soon to be others too!) and will be able to borrow up to 50% of the value of our collateral.
In this example I will use Luna to take out a loan. Head to the bASSET tab in the Anchor web app. Click the Luna/bLuna option.
We are now going to “Mint” some bLuna by “Burning” our Luna. bLuna is bonded Luna, and is the asset we need to take out a loan. You will be able to turn your bLuna back into Luna at 1:1 ratio if you change your mind, don’t worry!
Type in the amount of Luna you want to turn to bLuna and click Mint at the bottom of the screen. Wait for the transaction to compelte, and you will have your bLuna and be ready to borrow!
Now head to the Borrow tab of the Anchor Web App. At the bottom of the page you will see an option to provide bLuna. Click this.
Type in the amount of bLuna you want to provide as collateral. The more bLuna you provide, the higher your borrow limit.
At the bottom (green bar), you will see your loan-total-value (LTV). This shows the value of your loan relative to your collateral. This is an indicator of the risk on your loan. If this reaches >60%, your collateral will be liquidated to repay your loan.
Click proceed, confirm the transaction and you are ready to go! Borrow complete.
On the borrow tab of the Anchor Web App you will be able to see the details of your loan. On the left you can see the value of your collateral, in the middle your borrowed value and on the right the net interest you are paying on this loan (ANC rewards minus borrowing interest rate). Keep an eye on the the green LTV bar at the bottom of the screen. If you see this creeping up towards 60% you might want to repay some of your loan, or post more collateral. You don’t want to get liquidated!
Repaying your loan:
When it comes time to repay your loan, click the Repay button at the top of the borrow page. Type in the amount of UST you want to repay. To repay your loan in full, click the “Max” number just below the Repay Amount tab (this is indicated in red in the screenshot below).
The more UST you repay, the more your LTV will decrease. Add UST until your LTV falls to a value you feel comfortable with. Then click proceed. Confirm your transaction, and you are good to go.
