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DeFi App Promising 20% Interest on Stablecoin Deposits Raises Concerns

  • Founder Do Kwon defends high rate offered by Anchor Protocol
  • Chief takes bets platform powering UST stablecoin may collapse
Updated on

A nearly 20% interest rate is unheard of in most of traditional finance. But that’s exactly what Anchor Protocol is promising people willing to deposit the crypto stablecoin UST into its decentralized finance app.

It’s a hefty return for simply parking an asset in a savings account when most regular banks provide less than 1%. But according to Do Kwon, the man behind the Terra blockchain powering both Anchor and UST stablecoin, the high interest rate is a reflection of the current level of returns DeFi can offer investors.