Anchor Protocol: A How To Guide to DeFi (and earning 20% APY)
I spent a week utilizing Anchor Protocol to swap, buy, wrap, bridge, stake, deposit into a Liquidity Protocol and then stake the LP. And below, I laid out a simple step-by-step guide for anyone who is curious about how DeFi works.
I’m just gonna admit it: Given I run the best crypto PR practice in the galaxy, I should know more about DeFi. The reason Ditto got so good at crypto PR is because we took the time to learn it. But during the DeFi summer of 2020, I was preoccupied trying not to die and keeping Ditto running (spoiler alert: last year was our best year ever).
That all changed when I got an email from Paul Veradditakit about Anchor Protocol and how you can earn 20+% by depositing its stablecoin US Terra. I love Paul’s emails because they clearly explain what the project is and why it matters.
If you want to learn more about Anchor Protocol: https://medium.com/anchor-protocol.
So, I “learned DeFi” on my own, and I wanted to share with you a “How to Guide” around Anchor’s Protocol and US Terra and Luna — the two coins.
I also want to share, because I realized that DeFi has a communication problem. It didn’t have to be this hard for me — a noob to DeFi — to learn this. But yet, it took way too long and way too much research to figure it out. It used to be acceptable for crypto to be hard, but our industry is at a point where things need to be easier to use and better explained to a growing customer base.
Goal: Deposit US Terra on Anchor to earn 21+% APY
Before you begin, make sure you download Metamask and have eth in it to pay for those pesky gas fees.
Step One: Here is the Anchor platform to deposit US Terra: Click here.
Step Two: You have to download Terra Station and get a Terra wallet to connect to Anchor: Click here.
Step Three: You can get US Terra on Uniswap. Look for UST and swap out any ERC-20 token for wUST (“w” means it’s wrapped in Ethereum to look like an ERC-20 token).
Tip: Buy more than a few bucks of wUST, because I lay out below a few other things you can do with US Terra after you deposit it on Anchor.
Step Four: You now have wrapped Terra and you need to transfer it from Ethereum to Terraform on Terra bridge: Click here.
Full disclosure: This was the hardest part for me. Here is a good guide on how to do Terra Station and Bridge: https://docs.mirror.finance/user-guide/terra-bridge.
Take a breath! You are almost done!
Step Five: Now, you have US Terra in your Terra Wallet. You should see it in Terra Station and on Anchor’s platform (connect your wallet, hit refresh and it may take a minute). Finally, click Deposit and choose how much you want to deposit. And you are done!
Congrats! You just bought a wrapped coin, transferred it to another blockchain and staked it on a platform!
Super Bonus: There are airdrops!!
Goal #2: Stake Luna
So, after I deposited US Terra, I saw a few other things I could do on Terra Station, like stake Luna for a nice yield too. So, I went through that process.
Step One: Buy Luna on Uniswap. Or swap for it on Terra Station.
If you are going through Uniswap, swap out any ERC-20 token for Luna (which is wrapped). Again, make sure you have enough eth in your Metamask to pay for transaction.
Step Two: Convert it from Ethereum to Terra blockchain using Mirror Protocol: Click here.
Once your on the Meth page, connect to Metamask and click on “My Page.” Click “send” for what crypto you want to convert from your Metamask to Terraform.
Take a breath! At this point, you should see Luna in your Terra wallet and on Terra Station.
Step Three: Open Terra Station and click on Staking and then simply delegate Luna coins to whatever project you choose.
Another, Easier Way: If you have US Terra already, open Terra Station, click swap and swap UST for Luna. And then stake it.
Goal #3: Participating in a Liquidity Pool
So, I had already come so far, why stop now? Going through this experience, I saw that there’s a Mir/UST Liquidity Pool (LP). If you already have US Terra, why not keep going! Mir is the governance coin for Mirror Protocol.
Step One: Buy Mir on Uniswap by swapping. I used USDC. And again, make sure you have eth for fees.
Step Two: Then you want to add Liquidity: Click here.
Tip: You have to have an equal amount of each coin when you deposit. So, however many Mir you deposit, you need that many US Terra too.
Step Three: That’s it! And you should see tokens in your Metamask that represent your position/ownership in the LP. It seems to be getting easier.
Don’t freak out tip: You may go back to Uniswap and not see your LP in the Pool section. Make sure you remember it was Mir/UST so you can search for it.
Goal #4: You can stake your LP!
I figured that while I have the shovel in my hand, I might as well keep digging. So, I saw on the Meth page that I can stake my Mir/UST LP and earn more Mir in one easy step.
Right Here: Stake your LP.
So, that’s it! I hope this was helpful, and I’d appreciate any feedback on how I could do this differently and better and explain it in a way that makes DeFi more accessible.
