Anchor Borrows and Deposits

    Introduction to Anchor

    Anchor provides lending and borrowing through smart contracts deployed on the Terra blockchain. Lenders deposit $UST stablecoin and earn a yield of ~20%. Borrowers have to provide bAssets (bLUNA, bETH) to take $UST. The purpose of this investigation is to seek insights into borrowing and deposit patterns on the Anchor platform.

    Deposits and Borrow Historical Data

    To begin with, let's look at a high level, how deposits and borrows have accumulated in $UST over the lifespan of Anchor.

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    We can see that there have been more deposits of $UST into Anchor than borrows. Deposits are currently about 2x of borrows, which makes a lot of sense as Anchor has to provide lenders with their capital anytime they need it.

    Next, let us break this down a bit and look at the weekly $UST amounts across deposits and borrows.

    Analyzing Deposit and Borrow Patterns

    Weekly patterns for Anchor deposits and borrows exhibit different patterns. Deposits patterns seem to grow steadily with user growth on Anchor whiles borrowing shows a zig-zag pattern. The pattern of Anchor borrows can be attributed to a correlation with LUNA price. Since bLUNA is provided as collateral, anytime LUNA price rises, Anchor users are able to borrow more UST because the loan to value ratio reduces.

    In conclusion, while Anchor deposits correlate with user growth, Anchor borrows exhibit a pattern that is similar to LUNA price movement.

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