Lido & Anchor: Collateralising bETH in Anchor Protocol
With the launch of bETH on Anchor, ETH stakers can now collateralise their stETH (in the form of bETH) on the Terra blockchain - in effect, allowing stakers from one blockchain to participate in another blockchain in an efficient manner.
To wrap your stETH to bETH, visit anchor.lido.fi.
To deploy your bETH on Anchor, visit app.anchorprotocol.com/earn.
What is Anchor Protocol?
Anchor is a protocol on the Terra blockchain that allows for depositing and redeeming Terra stablecoins, minting bAsset tokens, borrowing Terra stablecoins with bAssets as collateral, and participating in Anchor governance.
As a protocol capitalising on staking rewards across a universe of blockchains via bAssets (bonded assets), Anchor’s upcoming move to bring bETH as a collateral option on Anchor not only grants stETH holders increased opportunities via access to collateralised lending and Anchor liquidity mining rewards - increasing Anchor TVL via the flow of stETH liquidity - but also significantly diversifies Anchor’s asset bucket, bolstering Anchor’s sustainability in the long term.
What is bETH?
bETH is a token that represents stETH tokens on the Terra blockchain. Unlike stETH which rebalances daily, the balance of bETH remains constant, similar to a wrapper (wstETH, for example). bETH staking rewards can be claimed in the form of UST, Terra’s native stablecoin. While stETH is wrapped to bETH all staking rewards from Lido would be converted to UST and can be claimed by bETH owner.
As bETH is deposited as collateral to Anchor, rewards from staking accrued by Anchor Protocol are distributed to aUST holders. Rewards will be distributed in ANC (~31% APR at the time of writing) as incentives to borrowers.
How to wrap bETH
To get bETH, you will first need to have ETH or stETH which you can wrap. The wrap process accepts either (either Ether, get it?). Visit Anchor.lido.fi to convert your ETH/stETH to bETH.
- Connect your Ethereum wallet by selecting “Connect wallet” at the top right.
- Input the desired amount of stETH/ETH which you would like to wrap to bETH.
- Input the Terra wallet address where you would like to receive your bETH.
- Select “Unlock token for conversion”.
- Approve the first transaction.
- Afterwards, select "Submit" and confirm the final transaction.
How to use bETH on Anchor
Once bETH is deposited as collateral to Anchor, all staking rewards accrued by Anchor Protocol are then distributed to aUST holders. ANC tokens are rewarded as an incentive for borrowers. As it stands currently, users are actually getting rewarded to borrow!
Additionally, the addition of bETH will serve to bolster UST demand, as stETH staking rewards will be converted to UST prior to distribution.
- To use bETH as collateral visit Borrow.
- Deposit bETH by connecting your Terra wallet to Anchor by selecting “Connect wallet” in the top right.
- Scroll down to “Collateral List”.
- Under the bETH tab, select “Provide” to the right.
- After providing bETH as collateral, you can borrow UST against it.
- Select “Borrow” at the top of the page and confirm the transaction.
7. You now have UST, which you can use to your liking.
8. You will be paying borrowing APR, but you will also receive ANC rewards as an incentive.
With the launch of bETH on Anchor, ETH stakers can use their stETH as collateral on the Terra blockchain. This allows stakers from one blockchain to participate in another blockchain in an efficient manner.
As Lido grows to offer more staking services across various blockchains, we hope to see Anchor Protocol integrate the respective staking token (whether that be stSOL, etc) into their protocol.