The massive Anchor DeFi ponzi is rapidly plunging deeper into a death spiral. Deposits skyrocket while Borrows wane. They can’t reduce their 20% ponzi yield without triggering a mass exodus.

Sharing is Caring!

by DontMicrowaveCats

TL;DR- Anchor Protocol is one of the biggest Ponzi schemes in DeFi. They promise people who deposit UST stablecoin to their platform an eternal 20% yield.

The only way they can pay this yield is through borrower interest payments and the “Yield Reserve”. The Yield Reserve is basically just the protocol’s internal fund to pay depositors.

However there are not nearly enough borrowers to cover the yield payments (and the interest rate charged to borrowers isn’t high enough anyway). So the Yield Reserve is rapidly depleting every day.

See also  Everyone is Going to Starve to Death Because of American Lunacy

A few weeks ago right before the Reserve dried up completely, the devs magically “found” $500 Million worth of UST to top it up. But it continues to drain. The more depositors and the fewer borrowers, the faster it goes down.

They can’t reduce the 20% yield without depositors exiting en masse. So basically, they have begun a long, slow death involving billions of dollars

Help Support Independent Media, Please Donate or Subscribe:
See also  Here Are 11 Statistics That Show How U.S. Consumers Are Faring In This Rapidly Deteriorating Economy

Views: 11

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.