Introduction

The Anchor Token (ANC) is Anchor Protocol's governance token. Its total supply is 1 billion. ANC tokens are rewarded to the following users:

1. Borrowers - 400 million (40% of total supply) is earmarked for UST borrowers on Anchor Protocol to incentivise borrow demand so as to provide deposit rate stability;
2. ANC liquidity pool (LP) stakers - 50 million (5% of total supply) is to be distributed to the ANC-UST pair liquidity providers.

Reward usage

Users who claim ANC rewards can be grouped into 3 categories:

1. Borrowers only - c. 43% of all reward claimers;
2. LP stakers only - c. 23% of all reward claimers;
3. Borrowers and LP stakers - c. 34% of all reward claimers.

Breaking down how different groups of users deploy their ANC reward, two main differences can be observed:

1. "LP stakers only" deploy more to Anchor governance staking relative to the other two user groups.
2. "LP stakers only" swap less relative to the other two user groups.

ANC reward usage (see appendix for definition) can be broken down into 3 main groups:

1. Deployed into liquidity pools (c. 51% of transactions) - these are denoted by Flipside's contract address labels "anc-ust pair", "ANC token/uusd LP", and other misc. liquidity pools in the pie chart below;
2. Staked in Anchor Protocol governance (c.34% of transactions);
3. Used in swaps (c. 15% of transactions) - these are denoted by Flipside's contract address labels "route swap" and "Router".

Reward user groups

Appendix - ANC reward usage definition

ANC reward usage is measured by the number of successful transactions, involving the ANC token, signed by wallet addresses which have claimed ANC rewards. In pseudo-code:

Reward usage = count(distinct tx_id) where

• msg_value:contract = 'terra14z56l0fp2lsf86zy3hty2z47ezkhnthtr9yq76' (ANC token address)

• msg_value:sender = addresses which have claimed ANC reward

• msg_value:execute_msg:send:contract is not NULL (this removes transactions which transfer ANC to a different address and transactions which increase allowance for ANC in liquidity pools)

• tx_status = 'succeeded'

For ANC holders, it is comforting to see that the majority of ANC rewards are being deployed into liquidity pools and staked in governance instead of being swapped/sold.

Closing thought