• May 27, 2022

Anchor Protocol (ANC) destroyed by the Terra crash

Anchor Protocol (ANC) destroyed by the Terra crash

Prior to the de-anchoring of the UST and the eventual collapse of Terra (LUNA), the Anchor protocol (ANC) was one of the largest DeFi platforms in crypto. But the project was heavily exposed to the UST, and the de-anchoring had a massive impact on its value. But will the ANC ever get over it?

  • The ANC lost almost 1,000% of its value shortly after the UST was de-anchored

  • At one point, the coin dropped from $2.13 to $0.08.

  • The road to recovery will be difficult but not impossible.

Data source: TradingView

How will the anchoring protocol (ANC) recover?

It will be some time before the ANC recovers. This recovery will depend on two things. First, the speed with which the Terra chain is able to solve the collapse of LUNA will be crucial. Secondly, the return of the UST to its anchor will have a huge impact on the lifting of the ANC in the long term.

Moreover, the ANC has already shown that it has what it takes to return. For example, shortly after the UST was detached from the dollar, the ANC literally collapsed. It seemed that he was going to zero. But we saw an instant reversal, with the ANC rallying almost 1,500% from its lows. This is a sign that investors are still confident in the protocol.

Despite this rally, the Total Value locked on Anchor has not really improved. After the UST crash, Anchor’s TVL dropped to $307 million. Prior to that, Anchor was ranked 4th in terms of TVL. The accident pushed him to 60th place. We have not seen any improvement in TVL. This could hinder any hope of recovery.

Should you buy Anchor now?

There are still many unknowns regarding the anchoring protocol. For example, despite the efforts of the Terra community to defend the UST peg, the stablecoin continued to collapse.

It doesn’t look like the problem will be solved anytime soon. As such, just avoid the ANC for now until new developments on LUNA and UST are announced.