Earn 20% APY on stable coins with Terra and Anchor

4 min readJan 15, 2022

UST adoption is getting massive, and a 20% APY on stable coins is the main reason. Put your savings to work!

With so many pumps and dumps on the crypto market, a popular choice for many people is holding stable coins. And besides holding, if you put it to work you will be able to get a passive income, that goal that will let us live the life while earning money.

Now, if you’re in Defi (Decentralized Finance) for a while, you may know that stable coin farms usually have a low APY. So we will usually find rates between 2 and 10% in some cases. That’s until Anchor Protocol was released.

What’s Anchor Protocol exactly?

Anchor is a savings protocol that offers low volatility returns on UST deposits, Terra’s stable coin. It has its own governance token, $ANC, and you can add liquidity to it. You can also lend/borrow UST using bonded Luna and bonded Ethereum as collateral, or hold them on your wallet and earn a 7–9% APY on UST.

What’s UST? That’s not USDT, right?

Exactly, UST stands for Terra USD and it's not tether, but Terra’s stable coin. Although USDT is a stable coin as well -both are pegged to USD- there’s an important difference. UST is an algorithmic stable coin. When a new UST token is minted, an equivalent amount of LUNA is burned and vice versa, in order to achieve the stability needed to make the UST value the nearest to 1 as possible.
Then we have the differences of chain, Terra can perform hundreds of transactions per second with very low fees. In fact, it’s very rare if you have to pay more than 1.5/2 UST on fees, in the worst case. Usually, it's < 0.20 UST at the moment of writing this article (January 2022).

UST is not only on Terra. By now it was bridged to Ethereum, Solana, and Avalanche in order to take profit on different multi-chain strategies.

Regarding UST value locked on Anchor, these are the numbers for 15 January 2022, being only raising.

The key of Anchor: Earn (20% APY)


Software Engineer, Entrepreneur and Writer — Italy 🇮🇹