Deposit Rate 18-20, perhaps should be 12-15%?

Everyone know this massive market correction made many people be liquidated and thus removing a lot of borrowers from the system, where it lead to create a huge imbalance from depositors and borrowers making the borrow APR 18.49% where the deposit APY 18%, which this is not sustainable in the long run.

Do said the true interest rate for depositors under stress conditions it’s 10-12% I believe, that’s where the system ultimately should fall.

My concern here is it’s better to have a lower yet still pretty attractive yield than breaking the system.

Also I never understood why people want Terra / Anchor to partner with other to get more non crytpo savy depositors from the real world, I understand the more UST , the higher burn lunas, but if they would not use the borrowing function leading to another imbalance of the anchor system deposit yield payment system. What we really need for Terra eco system is more UST usage… I would really like to hear thoughts on this last point, how ultimately the system could even work if this happens where massive amount of UST flows to deposits but don’t borrow as much.

I have to disagree. Anchor was meant to be a stable savings vehicle with stability being its core value proposition, the market is simply being volatile and the yield reserve was created for this very reason. The yield reserve helps stabilize APY through down markets.

If we change the APY every time there’s a slight downturn we will lose the main competitive advantage that Anchor gives to savers, stability and high yield. Anchor was meant to be a safe haven in both booms and busts. In the same way that the market tanked recently, the market can just as easily go up many fold and the protocol will once again see a surge in borrowing demand.

Let’s remember that this is crypto, downturns happen fairly often but we cannot lower the APY every time it happens, otherwise what’s the point of advertising stable yield for savers? Might as well let the market decide the interest rate which would mean we lose our competitiveness. Just two months after launch we can’t already be thinking about lowering the rate, this wouldn’t align with Anchor’s core principles.

I’m actually not saying to lower because of the downturn in the markets but to be lower as a final yield that is more reasonable if Anchor and terra plans on having more deposits.
This would mean Anchor and other dApps that are build around Anchor deposit rate, don’t have to depend as heavily on the borrowing ratio.
It’s easier to maintain a 12-15% yield rate than a 18%-20% when the deposit growth far outstrips the borrowing .(which ultimately is what you want, people to convert their fiat and deposit UST for yield)

As a investor I want this to work, if we are too greedy we might not make it in the end.
15% deposit rate is amazing for a stable coin and knowing UST, how stable it been during all this market turn, it would just give more confidence in the system.

Just giving my 2 cents here, again, we shouldn’t rely so much on heavy borrowing to maintain such rate as it is now. Moving forward if UST and other dapps start making use of the deposit rate without having the borrowing side demand, the system might not work in the long run… but then again I might be totally wrong about it, I hope Do will give his view about it.