Lido Finance announced last Tuesday, June 22, through its Twitter account, that stETH is now in Inverse Finance, so it invited users to use Anchor from Inverse Finance to implement its stETH as collateral to borrow assets.
“This week, Inverse Finance approved a governance proposal to include Lido’s STETH in Anchor. Anchor is the second money market protocol to include STETH, allowing you to lend and borrow against your STETH. Because the value of STETH increases when wagering rewards, it means that you can borrow against an asset that is earning wagering rewards”, he said through an article posted on his website.
What is Inverse Finance?
It is a set of permissionless decentralized financial tools governed by Inverse DAO, a decentralized autonomous organization running on the Ethereum blockchain. Its main products are Anchor, DOLA and DCA Vaults.
According to the company, Inverse.finance is governed and managed by its community of token holders (numbering over 2,000 holders) and elected delegates.
About Anchor
It is a money market protocol like Maker, Compound, and Synthetix, but makes it easy to borrow and borrow capital efficiently by issuing synthetic tokens (for example, DOLA) and non-synthetic credit (for example, token loans such as ETH). Those familiar with Lido integration with Terra / Luna should not be confused with Anchor Protocol. Inverse Finance Anchor is a separate entity from the Terra / Luna Anchor Protocol.
How to deposit STETH in Anchor
The company explained that by providing STETH as collateral on Anchor, users will be able to borrow assets based on their STETH up to a collateral ratio of 60%, by following the steps below:
1. Visit Reverse Financial Banking
2. Connect your wallet by selecting “Connect wallet” at the top right of the screen.
3. Connect using MetaMask or WalletConnect if you are using a mobile wallet such as the Argent or Rainbow wallet.
4. Look for stETH in the “Supply Marketplace”. Select it and enter the desired quantity of STETH that you would like to supply Anchor.
5. Once you approve the transaction, you will see your deposit in the “Supplied” column.
“By providing assets as collateral on Anchor, users will be able to borrow assets and, depending on the asset, they can also earn INV rewards. This is highlighted under “APY Rewards”, the INV rewards to which you are entitled. stETH does not currently receive any INV rewards, but this may potentially change soon”, he added.
Also read: Alchemy announced partnership with Optimism
How to borrow assets
The company indicated that, after providing STETH as collateral, the user can borrow a loan. When borrowing assets, you must pay interest, included in the “Rate” percentage in “Loan Market”.
In his view, when borrowing assets, users must be tired of their collateral ratio so as not to be liquidated. Settlements force providers to lose their guarantees to pay their outstanding debt. In addition, he shared the steps that the user must follow:
• Select one of the assets you would like to borrow from the “Loan Marketplace”.
• Enter the amount you would like to borrow, relative to the amount you provided as collateral. If you have posted collateral, you will see the maximum amount you can borrow from an asset under “Maximum available to borrow.” You can borrow up to a maximum of 60% of your deposited collateral, which equates to a collateral ratio of 180%.
• Select “Borrow”.
• Finalize transactions.
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