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The Terra collapse has not just seen Luna holders out of pocket – many investors have lost Terra USD holdings on the Anchor Protocol platform.
Anchor Protocol paid an APY as high as 20% for users who deposited their Terra USD (UST). The UST holdings are converted into aUST, where they earned yield on a daily basis. Many aUST investors poured life savings into Anchor Protocol on the understanding that Terra USD was pegged to the US dollar.
As we all know, Terra USD collapsed in May and is trading at $0.09877. An investment of $1,000 would now be worth just $99.
Below are 5 alternatives to Anchor Protocol after the Terra collapse.
EverGrow Coin is a hyper-deflationary token with BUSD reflections.
The project launched in September last year with the goal of becoming the no.1 crypto for passive income. To date it has rewarded $37 million to EverGrow Coin investors – that is, without them selling any EGC tokens.
EverGrow Coin has fast become the leasing BUSD rewards token in the Binance ecosystem. It redistributes 8% of a 14% transaction tax on EGC every 6 hours in BUSD to all EverGrow Coin holders.
For example, with a daily volume of $3 million, means $240,000 would be distributed among investors.
EverGrow Coin has a modest market cap of just under $200 million but it arguably has one of the most ambitious roadmaps in the crypto space. The project will soon roll out an NFT marketplace, a content subscription platform, a crypto wallet, staking pools, as well as a metaverse integration before the end of 2022.
This makes EverGrow Coin a great investment as for low prices investors will be able to take advantage of all expected growth through this year and beyond – the BUSD stablecoin is also the only leading one with regulated, licensed US-based banks providing security and stability.
Binance is home to the world's largest crypto exchange by daily volume.
Its BUSD stablecoin leaped into the crypto top 10 in the wake of the Terra collapse. This has led many to ask: does Binance offer a savings protocol similar to the Anchor protocol offered by Terra?
The answer is: yes it does.
The BUSD savings accounts with Binance offer up to 10% APY on BUSD savings. This is far below the current Anchor Protocol APY of 18% – but Anchor Protocol could not sustain such a high yield, and has collapsed in a dramatic fashion.
The BUSD savings tiers offer 10% APY on savings between 0-2,000 BUSD, and thereafter between 1%-2% depending on the size of the savings portfolio.
PoolTogether is a crypto-powered savings protocol similar to Premium Bonds.
Users can deposit stablecoins like USDC or DAI on the Ethereum Mainnet and Polygon networks with an expected APY of 9%. Daily and weekly odds of winning depend on the size of the deposit, with rewards split into tiers from $5 up to $1,000.
It is far more likely for large deposits to earn more rewards, however, lucky wallets have won over $1,000 with a deposit of $250 after holding for sufficient time.
A key feature of PoolTogether is that you can withdraw your money at any time. If you don't win, neither do you lose your initial deposit.
Stablecoin savings protocols can be safer than cryptocurrencies, as stablecoins are designed to hold the same price as their fiat counterpart. This makes them less volatile.
(As the Terra collapse has demonstrated, however, this is not always the case.)
Nevertheless, there are top 10 cryptocurrencies that offer rewards for staking. One of these is Cardano (ADA), which according to the online calculator can offer an APY of 5% for staking 1,000 ADA tokens.
Coinbase has also made staking ADA much simpler by offering in-app staking rewards of 3.75%.
The price of ADA has been falling this year and has a current price of $0.5613. Nevertheless, it remains the 7th biggest cryptocurrency by market cap with strong potential for growth in the months to come.
While the 3.75% APY on Coinbase is nowhere near the 20% of Anchor Protocol, a doubling in the Cardano price has the added benefit of increasing your underlying investment as well.
Another alternative to Anchor Protocol is to stake Ethereum 2 – which also can be done easily on Coinbase.
Ethereum 2 (ETH2) is an upgrade to the Ethereum network which should do away with the high gas fees and slow speeds. Ethereum 2 will most significantly shift the Ethereum mining model from proof-of-work to proof-of-stake.
Coinbase is one of the top two cryptocurrency exchanges, with an easy-to-use interface and even a Coinbase Card to let you use your crypto in day-to-day life. It now allows you to stake Ethereum in the Coinbase app, which converts it to ETH2 and receives an APY up to 4.5%.
Ethereum 2 cannot yet be used, however, both ETH and ETH2 will merge into one token when the Ethereum upgrade is complete this summer.
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Disclaimer: Analytics Insight does not provide financial advice or guidance on cryptocurrencies and stocks. Also note that the cryptocurrencies mentioned/listed on the website could potentially be scams, i.e. designed to induce you to invest financial resources that may be lost forever and not be recoverable once investments are made. This article is provided for informational purposes and does not constitute investment advice. You are responsible for conducting your own research (DYOR) before making any investments. Read more about the financial risks involved here.
