Terra launches floating rate loan services, reserves are now $209 million
You can receive a floating rate on the Terra-powered Anchor lending and borrowing platform
Long-awaited floating rate is now officially available on Terra through the Anchor platform. According to WuBlockchaincurrent interest is 18% with reserves up to $209 million.
Lending services have been the most popular solutions in the cryptocurrency market, and especially in the DeFi industry, as they are the perfect tools for receiving short-term exposure to a particular asset or moving money without the need to cash out through exchanges. .
Terra lending platform Anchor officially launched variable interest rates yesterday, and the interest rate this week was 18%, down 1.5% from last week. The reserves are now $209 million, a net outflow of about $30 million since last week. pic.twitter.com/ElNvjeMqoa
— Wu Blockchain (@WuBlockchain) May 2, 2022
While cryptocurrency traders and investors (borrowers) are quickly exposed to assets they want, lenders qualify for stable profits by spending their money. The profit is determined by the interest rate, which can be both stable and variable.
The main advantage of variable interest is the ability of lenders to lock in their money at an above-average interest rate when the contract runs out. The biggest drawback is the diminishing interest at high saturation.
With the newly implemented solution, we already saw the effect of floating rate as it decreased from 19.5% to 18% after the contract’s reserves reached $209 million. The rate drop caused $30 million in outflows. If a fund’s reserves need to be depleted, interest rates will most likely bounce back upwards to attract more liquidity.
The total value locked into the Achor platform, which provides the newly arrived solution, is now close to $20 billion UST, with total deposit of $13 billion and total collateral at $5.6 billion. The APY on UST deposits is currently close to 18%.