Annual Percentage Yield (APY) is the yearly interest earned on your deposit and interest paid in crypto depends on that particular cryptocurrency's value. APY sounds to be similar to APR, but its not the fact, as it takes into account interest compounding and it will be preferred metrics by most of the companies.

Anchor Protocol is a savings protocol based on the Terra blockchain that provides its users with low-volatile 20% yields.

Initially, Anchor protocol helped to increase the demand for UST, which is Terra’s USD-pegged stablecoin, and its ultimate goal is to be the interchain protocol where users can borrow layer-1 native tokens. At first, yields with Anchor Protocol were only available on deposits in UST but this soon changed with the launch of EthAnchor. With this update achieved in partnership with Orion Money, users can now deposit Ethereum-based stablecoins like USDC, USDT, DAI, and BUSD as well as wrapped UST onto EthAnchor. The yield for wrapped UST is between 19.5% ~ 20.5%, and for all other stablecoins is ~ 16.5%. It is worth noting that in the future Anchor protocol is also planning to introduce non-USD pegged stablecoins, such as EUT, THT, and KRT.

Althouth 20% APY appears too good to be true, it is real. Anchor protocol can generate at least 24% staking revenue on deposits as a result of the 12% per annum LUNA staking yield and the maximum LTV rate. Also, the loans are overcollateralized meaning that the staking rewards are magnified which further contributes to the high-interest rate. Even though the system can generate over 20% in returns, by fixing it at 20%, Anchor ensures a dependable and stable yield.

This is the simplest strategy for generating income using Anchor Protocol, which is similar to bank deposits, but the difference is that the platform is decentralized and offers higher returns. Currently, the yield on UST savings deposits reaches 20% per annum. To receive income from UST deposits, you just need to deposit them by clicking the button Deposit.

Let us explore one of the yield farming strategies on Anchor protocol, where in once fund is available in your account, navigate to the Anchor web app and choose the Earn tab to deposit tokens.