anchor [ANC]: We have worrying days ahead amid deteriorating deposit lending volumes

It is rare to see a week-long ecosystem growth followed by a week-long price decline. But that was the case for Anchor as it rose and the correction became the leader of this week’s biggest losers.

Someone dropped the anchor

ANC is down 32.72% from where it was seven days ago and while broader market signals can largely be blamed for this, concerns among its investors have also contributed to the current conditions. On April 11 alone, the token fell 20.29%.

Anchor Price Action | Source: TradingView – AMBCrypto

Although the total value tied to the network has seen a significant increase over the past few days, the most significant has come from the partnership with Acala to strengthen the decentralized stablecoin space on Terra and Polkadot.

Acala will add Liquid DOT (LDOT) and Liquid KSM (LKSM) to Anchor’s collateral options, tapping into latent lending demand for the TerraUSD (UST) stablecoin within the Acala and Kusama ecosystems.

Acala further explained how they would use a USD for the same purpose, saying:

“Acala & Anchor will also establish deep liquidity pools for aUSD (Polkadot & Kusama’s native decentralized stablecoin) and UST on Acala, which will serve as a gateway to the Polkadot ecosystem for UST users.”

In this way, the partnership represents a significant milestone in uniting the Terra and Polkadot ecosystems to bring decentralized money to the masses. And at the same time offer users access to more liquidity and return opportunities.

Additionally, the protocol’s native token ANC was also listed on Crypto.com this week.

But regardless, Anchor’s primary function as a lending protocol hasn’t attracted any significant investment as Anchor’s treasury remains depleted, with approximately $8.86 million remaining in it to date.

Anchor Treasury | Source: Dune – AMBCrypto

This shows that while the revenue generated by the protocol in the credit markets continues to flow, the protocol’s revenue is steadily declining, raising concern for the future of the protocol as it was recently awarded $450 million by the Luna Foundation Guard has been filled up.

This is also confirmed by the growing difference between deposits and borrowings, which increased from $6 billion to $10 billion in one month. So it seems like things aren’t really improving for the log more broadly.

Borrow anchor deposit and difference | Source: Dune – AMBCrypto

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