Anchor Protocol Votes In Favor of Proposal 29; What does it mean?

Paigambar Mohan Raj
Source: Analytics Insight

Anchor Protocol (ANC), one of the hardest-hit projects in the Terra (LUNA) and UST crash, has revealed that the community has voted in favor of Proposal 29.

As part of the proposal, the Anchor Earn and Borrow functionalities will be frozen to protect them from attackers. All operations on Anchor will be halted, except withdrawing cash and depositing $USTC to earn $aUST. Deposits with no interest will remain available indefinitely to allow Mirror protocol borrowers who use $aUST as collateral to get $aUST as needed to avoid margin calls.

Anchor Protocol’s problems began to surface following a bug attack that allowed a user to withdraw $800,000 from the system.

The user took advantage of the circumstance when the price of oracle for LUNC (Luna Classic) reached $5, even though the currency was not worth that much. One of Anchor’s platform users found the issue and deposited around 20 million Lido Bonded Luna tokens, which the platform miscalculated to be worth $100 million.

Although the deposited funds should only be worth $200,000, the user discovered the flaw and borrowed 40 million UST. Then after, the user withdrew $800,000 for the UST.

Other users began to discover the flaw as they attempted to take advantage of the opportunity. The crew, on the other hand, was fast to spot the flaw and fix it.

Several Anchor Protocol users resorted to Twitter to express their dissatisfaction with the platform. Some people complained they couldn’t get access to their deposited USTs, while others said the website was down.

Instead, the project decided to freeze its earn and borrow functionalities to protect it from hackers. The vote was announced on the 3rd of June and was open for 4 days.

Anchor Protocol has been a constant on the Terra network since its inception, and many members of the community want it to continue. The future of the facility is currently a topic of discussion in the community. The Anchor team has urged users to make their voices heard via their forum. Users have been encouraged to share their ideas on the platform.

At press time Anchor Protocol (ANC) was trading at $0.152086, down by 10.4%.