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 proposes to reduce interest rates to 3.5% and maximum deposit rates to 5.5% with target interest rates of 4%. Anchor Protocol is a borrowing and lending platform built on the Terra blockchain and offers loans on their deposits and returns on their UST deposits. However, many experts have previously said that the high interest rates offered by the platform for UST deposits are very difficult to sustain. As huge liquidity is needed to maintain 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 hope for the price of Terra (LUNA)
Terra’s price has crashed below his knees and he’s discovering a new low every minute. After hitting a 3-digit figure, the price added several zeros in its value, which currently makes the LUNA price look a lot like the SHIB price. And if the new LUNA tokens keep hitting, it would be nearly impossible to reinduce 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 soared by over 41,000% with over 2978.63 billion tokens in circulation. We cannot therefore expect the situation to stabilize in the coming months.
