Terra’s UST Staking Is Now Supported By Binance — Anchor Protocol Killer?

Binance is now offering staking of Terra’s ($LUNA) stablecoin, UST, for a return of up to 19.63% APY. 

Covered:

  • UST Staking On Binance
  • Will Binance Be The Anchor Protocol Killer?

UST Staking On Binance

The largest centralized crypto exchange in the world, Binance, has announced that they have launched locked staking on Terra’s ($LUNA) stablecoin, $UST. Users will be able to earn up to 19.63% APY and the interest payout time is on a daily basis.

When staking on Binance, users must lock their UST tokens up for a designated time period, or else they will suffer from withdrawal fees, etc. This is typical of both DeFi protocols and other CEX staking opportunities. However, there’s a catch. Users must select a duration for how long they want to stake their coins, and there is a maximum staking limit per user and a standard rate associated with the former. Here are the specifics:

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From Binance.com

Even with the lower APY’s and maximum staking limits per user, this is still great news not only for Binance users but for Terra’s algorithmic stablecoin as well. As stablecoins continue to be of more interest to the government, it is a good sign that the largest centralized exchange is showing initiative by providing this staking service to its users and to help secure the Terra blockchain.

Will Binance Be The Anchor Protocol Killer?

If you have been following the crypto space over the past few months, there’s no doubt you have probably heard of Anchor protocol. Anchor is a decentralized lending and borrowing protocol that provides users a stable, high interest rate on Terra’s stablecoin UST. If you haven’ heard of this protocol, check out our guide.

Anchor currently offers about 19.5 APY on UST, and there are no limits to how much UST you can “stake” (it’s not really staking, though, it’s just lending). Additionally, there are no withdrawal fees or locking periods, so users are able to put in however much they want at any time and withdraw however much they want at any time.

Now, with Binance’s release of their staking platform for UST, will that be the end of Anchor protocol? The short answer is probably not, but there are some factors to consider. Although Anchor protocol offers much more utility to users, Binance’s platform has so many users, and the UI interface is easy to use, making it easier for the less savvy crypto crowd to access high APY’s on UST. That being said, DeFi protocols are getting easier and easier to use, but that still may be a barrier too many crypto enthusiasts. Only time will tell if the decentralized Anchor protocol will be able to hold up to a big centralized entity like Binance entering the UST staking/lending space and let’s hope for the former.

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