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But the UST-Terra LUNA relationship still has its risks, as many bears are wont to note. There’s the natural volatility of the crypto market, the “inherently fragile” relationship in the LUNA-UST arbitrage and the risk that Terra’s use cases built around UST aren’t actually used. Perhaps the largest risk comes from the Terra-based Anchor protocol, a “decentralized” lending platform that pays nearly 20% yields to those willing to lend their assets to it. Currently, two-thirds of UST demand comes from Anchor, Clemens said, a phenomenon encouraged by Terraform Labs, which built Anchor to incentivize use of its blockchain.

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