Anchor Protocol (ANC) wrecked by Terra’s crash
Before the UST de-pegging and the eventual collapse of Terra (LUNA), the Anchor Protocol (ANC) was one of the biggest DeFi platforms in crypto. But the project was heavily exposed to UST, and the de-pegging had a massive impact on its value. But will ANC ever recover?
ANC lost nearly 1000% in value shortly after the UST de-pegging
At one point, the coin fell from highs of $2.13 to as low as $0.08.
The road to recovery will be difficult but not impossible.
Data Source: TradingView
How will Anchor Protocol (ANC) recover?
It will take some time before ANC recovers. This recovery will depend on two things. First, how fast the Terra chain is able to resolve the LUNA collapse will be crucial. Secondly, returning UST to its peg will have a huge impact on lifting ANC in the long term.
Besides, ANC has already shown it has what it takes to come back. For example, shortly after UST was de-pegged from the dollar, ANC literally collapsed. It looked like it was going to zero. But we saw an instant reversal, with ANC rallying by nearly 1500% from its lows. This is a sign that investors are still confident about the protocol.
Despite this rally, Total Value locked on Anchor has not really improved. After the UST crash, Anchor’s TVL dropped to $307 million. Before this, Anchor was ranked 4th in terms of TVL. The crash pushed it to 60th. We have not seen any improvements in TVL. This could hamper any hopes of recovery.
Should you buy Anchor now?
There are still many unknowns with regard to the Anchor Protocol. For example, despite efforts by the Terra community to defend the UST peg, the stablecoin has continued to fall apart.
It doesn’t seem the issue will be resolved soon. As such, just steer clear of ANC for now until further developments on LUNA and UST are announced.
Comments are closed.