The Anchor protocol community has proposed lowering the target rate of return on UST deposits to 4%. It is assumed that this contributes to the restoration of parity of the algorithmic stablecoin with the US dollar.

The author of the emergency proposal, Daniel Hong, was one of the developers of the original Anchor smart contract. He explained that lowering the deposit rate would prevent additional UST from entering circulation.

3/ I believe TFL should do this first, but I’m doing this as one of three people who worked on Anchor’s initial contract design.

I love everything I’ve done in my life equally, no matter how I feel afterwards.

— Daniel Hong 🪄 (@unifiedh) 11 May 2022

Anchor uses a variable interest rate. If the attempt is approved, its minimum value will be reduced to 3.5% and its maximum value to 5.5%. Voting on the proposal will continue until May 18.

At the time of writing, the rate of return on the protocol is 19.64%.

Since the beginning of the crisis in the Terra ecosystem, approximately 9.5 billion UST has been withdrawn from Anchor. The largest fund outflow was recorded on May 9 – 3.33 billion UST. The yield reserve of the protocol is also almost exhausted.

Recall that BlackRock and Citadel announced that they were not involved in the collapse of the UST.