Anchor Protocol Adds Solana as Collateral

On its way towards building the standard interest rate in crypto, one of the most prominent DeFi protocols diversifies into Solana’s ecosystem.

Anchor and Terra Welcome Solana

Anchor, the top passive income protocol built on Terra, onboarded $bSOL—a wrapped version of $stSOL—as borrowing collateral to obtain Terra’s stablecoin $UST.

The new addition was announced on May 7 via Twitter and gives $stSOL holders access to collateralized lending and $ANC liquidity mining rewards. Users get $stSOL by staking Solana on Lido – a multi-chain liquid staking protocol. Anchor plans to capitalize on stSOL’s $350 million market cap to grow its Total Value Locked (TVL) above the current $15 billion level.

The governance proposal from April 13 explained the borrowing mechanism:

“While stSOL is wrapped to bSOL, all staking rewards from Lido will be converted to UST and can be claimed by bSOL owner. Once bSOL is deposited as collateral to Anchor, all the staking rewards are accumulated by Anchor to be distributed to aUST holders, supplementing Anchor’s yield.”

This way, $bSOL holders can get $UST liquidity while still being exposed to Solana. 


The Anchor team wants to develop the “Gold Standard” for passive income on the blockchain – a safe and straightforward savings product to gain mass adoption. Adding leading protocols like Solana is a step closer to offering a benchmark interest rate for Decentralized Finance (DeFi). 

Nevertheless, there are still some risks involved while interacting with DeFi protocols. One of the main concerns is that the $UST pegging mechanism fails, meaning $UST cannot maintain its $1 rate. In the last few days across crypto, the market volatility challenged the stablecoin’s stability, which evened out for now. The Luna Foundation Guard was established to defend Terra’s economy and has already voted on some initiatives to help protect the peg.

To dive deeper into Anchor’s platform and learn how to use it, check out Web3Wire’s recent guide

What is Anchor Protocol:

Anchor is a decentralized savings protocol that provides stablecoin deposits with low volatility yields. Because the Anchor rate is powered by a diverse stream of staking rewards from major Proof of Stake (PoS) blockchains, it is expected to be much more stable than money market interest rates. As a result, the Anchor community believes that Anchor’s stable, reliable yield could become crypto’s reference interest rate.

Where to find Anchor:

Website | Twitter | Discord | Telegram

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