Terra’s Largest Defi Platform Plans To Wind Down After UST Crash

Terra’s largest DeFi platform, Anchor Protocol, has recently proposed freezing Anchor Earn and borrowing functions to protect it from attacks. Its community has finally voted in to decide its fate.

Anchor was essentially ground zero for the UST crash, given that 70% of the stablecoin’s supply was locked into the platform. It registered one of the largest drops in value ever as the stablecoin de-pegged.

Terra 2.0 falls by 80% from ATH

Anchor Protocol informed that users have chosen to limit its functionality. All actions on the platform aside from withdrawing funds and depositing USTC to acquire aUST will now be frozen. However, It added that Deposits without interest will stay open permanently. This will enable the mirror protocols, borrowers, to use aUST as collateral to gain the tokens when it’s necessary to present any margin call. More than 23.11% of the users voted “Yes” in the favor of proposals.

Terra’s meant to be stabelcoin TerraClassicUSD is trading at an average price of $0.0123, at the press time. In order to revive the collapsed Terra Chain, DO Kwon issued an airdrop. However, this move was also intended to provide aid to the old chain token holders. Meanwhile, new issued LUNA token’s price has dropped by 80% since its launch. It is trading at an average price of $3.60.

Anchor protocol mentioned that it has been an important part of Terra since the beginning. Most of the community wants it to live on. The decision around its future gets a serious place in the community.

Do Kwon hiked interest rate week before launch

According to a report, Anchor’s designers have come out to reveal that the original interest rate for the protocol was designed to be 3.6%. However, the proposal was not accepted by the Terra head, Do Kwon. Anchor’s interest rate was raised to 20% just a week before the launch.

The report mentioned that to keep the Terra stable, they set it a little higher than the bank interest. It was noted that there was not enough money with the company to pay the interest. However, the internal design document made by Terraform Labs showed that It was done to attract more investors.