Modify Market Parameters
The mechanism behind Anchor's money market is controlled by a set of carefully determined parameters, which are
Target Deposit Rate,
Threshold Deposit Rate,
Buffer Distribution Factor,
Max Borrow Factor, and
Valid Price Timeframe. The Modify Market Parameters poll allows users to submit governance polls that adjust parameters that effectively control the Anchor money market.
Target Deposit Rate, known as the Anchor Rate adjusts Anchor's target deposit APY, which the protocol attempts to achieve by constantly controlling the ANC emission rate as borrower incentives.
Threshold Deposit Ratevalue is the minimum deposit APY that Anchor tries to ensure by making direct deposit rate subsidizations from the yield reserve if the current deposit rate is observed to be below this value. Interest buffer usage from direct subsidization events are limited to a
Buffer Distribution Factorportion of the yield reserve's balance per subsidization event.
In cases of excessive and uncontrollable borrow demand, the
Max Borrow Factor, which limits the amount of stablecoin liquidity available to be borrowed, can be adjusted to allow aTerra redemptions to occur.
The money market is configured to be somewhat resilient to price oracle downtimes, where price values are considered invalid if they are older than
Valid Price Timeframe.