Top Anchor Users, Part 1.
Exploring Anchor Power Users.
What is Anchor?
The emergence of smart contracts has opened doors to a wide range of possibilities including business conducted in a decentralized manner known as decentralized finance. Anchor is a decentralized finance application that lives on the Terra blockchain. Anchor serves users by providing low-volatile yields on $UST stablecoin deposits. Users can also borrow $UST stablecoin deposits by providing collateral in the form of bonded assets (bLUNA, bETH).
Anchor Users
Outside of lending and borrowing, Anchor users can also stake ANC tokens in governance and earn a yield of about 8%. Although all these features (Earn, Borrow, and Governance Stake) are available to everyone, not everyone has taken advantage of every feature.
Hence, let's define a regular user as any address that has made a single transaction in either Earn or Borrow. A power user is any address that has executed at least a single transaction for both Earn, and Borrow. By virtue of this definition, a power user would have provided bAssets as collateral and is likely to stake ANC rewards.
Now let's get more profiles on who Anchor power users are what their transactions have looked like since genesis.
Are They Retail Investors or Whales?
To answer this, we first need to understand what retail investors and whales are. Conventionally, there are two types of financial market participants; retail investors vs institutional investors. Retail investors often trade in smaller amounts while institutional investors trade in relatively larger amounts. In crypto, we call accounts that trade in larger amounts as whales.
To determine whether Anchor power users are either retail investors or whales would require some generalization. Using the charts below, we analyze the daily average earn deposits and borrows over the past year.
On March 19, 2021, there was a high spike in the day's average earn deposit to 4.65M UST which is a clear indication of whale activity. Subsequently, the daily deposit average hovers between 10,000 UST and 100,000 UST which are no small amounts. In other words, every Anchor power user is able to deposit in Anchor every day, with a minimum amount of 10,000 UST. This is whale activity.
Looking at the daily average borrows, a similar pattern is noticed as daily averages fall between 10,000 UST - 160,000 UST and is steadily rising. By the definition that retail investors trade in smaller amounts, they do not fit this profile. Therefore, we shall make a generalized conclusion that Anchor Power users are mostly whales.
Do They Transact Regularly or Infrequently?
Next, we will analyze the frequency of transactions by our Anchor power users. The chart below presents the daily transaction count of the power users. The lowest daily transactions since genesis were 700 on April 3, 2021. Transaction frequency has steadily increased since then, with the current minimum threshold standing at 5,128. Dividing the total number of power users (470,000) by an average daily transaction count of 5,000, we get 94, which means that at least 94 power users transact every day. This is quite remarkable and regular considering the average transaction amount of about 50,000 UST.
Conclusion
We have been able to clearly define Anchor power users as wallets who have both provided UST in Earn, and also borrowed UST at the other end. It was noticed that about 70% of Anchor users have done both lending and borrowing. One key find in this investigation is that the share of power users is steadily increasing, and power users are the main drivers of the Anchor market. Anchor growth will not be slowing down soon, as power users are steadily onboarding.