Deep Dive | Mars Protocol

  • 6 MIN READ

*Disclaimer: I am contributing to Mars Protocol.

One of the most important pieces of infrastructure in any ecosystem is a credit protocol. This can be seen in more mature DeFi ecosystems like Ethereum where credit protocols like Aave and Compound have more than $20B in TVL. This is simply because they serve a crucial task in providing a platform for participants to borrow and lend their assets.

As of now, the Terra ecosystem lacks this important piece of infrastructure. While Anchor Protocol does allow for borrowing and lending, it is more akin to a savings protocol since its deposit rate is designed to be stable at ≈20%.
In order to do this, Anchor only takes in Proof-Of-Stake (POS) assets as collateral such as bLUNA and bETH.
In contrast, Mars Protocol is a complete credit protocol that enables Terra native assets (mAssets, ANC, MIR) to be borrowed or used as collateral, thereby providing them with another valuable use case.

How it Works

Like any existing credit protocol, Mars consists of two main participants:
Lenders: users who deposit assets to Read More