Aiming at Staking Mining! Cosmos, Polkadot, and Terra Collaborate on a New DeFi Project

According to reports, three major blockchain projects, Cosmos, Polkadot, and Terra, are collaborating to develop a new decentralized finance (DeFi) project called Anchor Protocol. The project aims to provide high-yield staking by decentralizing users' deposits across various PoS blockchain networks to earn stable high-yield interest generated from staking.

Decentralized Savings Product - Anchor Protocol

Anchor Protocol is a decentralized savings and finance protocol created through a collaboration of three prominent blockchain projects. Participants include the interoperable and scalable blockchain network Cosmos, Web 3.0 cross-chain network Polkadot, and decentralized stablecoin project Terra. According to an official press release, it is able to maintain a high deposit interest rate by leveraging rewards generated from various Proof of Stake (PoS) blockchain networks within the industry.

When users deposit stablecoins on the platform, the Anchor protocol automatically allocates a portion of the deposit to other PoS networks to earn PoS mining rewards. Ultimately, these mining rewards are distributed as interest on the user's deposit. Do Kwon, the founder and CEO of Terra, stated that this approach will offer a higher and more stable interest rate for Anchor compared to other DeFi protocols:

"While pioneers in DeFi like Maker and Compound have been revolutionary in creating a fully decentralized cryptocurrency market, the volatility of their interest rates makes them unsuitable as household savings products. The widespread adoption of DeFi requires creating a fully decentralized savings account that provides a reliable Annual Percentage Rate (APR)."

Furthermore, the development team of Anchor mentioned that the project's economic model is similar to traditional commercial banks. In commercial banks, a portion of customer deposits is set aside as reserve, while another portion is used to generate additional revenue.

Anchor Protocol plans to support PoS blockchains with Annual Percentage Rates ranging from 7% to 9%, and is set to launch on Cosmos, Polkadot, and Terra blockchains by the end of the third quarter of 2020. The development team also aims to expand the project to more PoS ecosystems in the future.

Decentralized Governance

In addition, Anchor will operate with a pre-decentralized governance approach. To achieve this, the team has established a governance council called the "Interchain Asset Association (IAA)" to oversee the platform. Advisory council members include Do Kwon from Terraform Labs, Zaki Manian from Cosmos, and Jack Platts from the Web3 Foundation. Initially, IAA will have control and oversight over the protocol, but as Anchor evolves, governance rights will be decentralized by distributing governance tokens to ecosystem participants. Zaki Manian from Cosmos stated:

"The upcoming 'Cosmos Stargate' upgrade will open doors for cross-chain economies, and I look forward to collaborating with IAA to lay the fundamental economic infrastructure for a globally interoperable blockchain."

On the other hand, Jack Platts, advisor of the Web3 Foundation, added:

"Increasing liquidity is a significant issue for Polkadot, as the unlocking period for DOT tokens used in staking mining requires about 28 days. Projects like Anchor enable DOT holders to participate in staking mining without losing token liquidity, thereby solving a practical problem."