The piggy bank that pays you to save — a proof of concept.
In America, the average household credit card debt is over $5,000. The interest that people have to pay on top of the debt? A whopping 16.28%. Americans are going into debt and are paying a hefty sum to live the life they want.
People are paying to purchase things they cannot afford. However, with the innovative applications built on the Terra-Luna ecosystem, this trend may be flipped on its head.
What if there was an application that paid and helped you to save for what you want? There would be less debt, more money, and more freedom for people who opt-in.
This is the goal for my hypothetical application temporarily dubbed as the “Oink Protocol.” It’s a piggy bank built on top of Anchor that pays you to save.
How it works
On the front end, users get to deposit their UST into accounts dedicated to a specified savings goal. These funds are locked up in a smart contract and are unlocked only when the savings goal has been reached. These funds are redirected into Anchor to earn a fixed yield of around 20% on the back end.
This commitment helps users stay the course towards their savings goal while meanwhile paying them an attractive yield. Moreover, users can speed up or take their time reaching their target according to their own personal circumstances.
But why would anyone want to lock up their funds until a specified goal is met?
Apart from the great yield Anchor will offer, users who lock funds can also earn “oink tokens” on top of their growing deposits in Anchor. These tokens can be sold in the open market via TerraSwap or used to purchase items in a marketplace that integrates the oink token. The oink token could also be staked to participate in the governance of the protocol.
But where does the oink token get its value from? It comes from the buying pressure of advertisers.
With the oink protocol, advertisers will have the opportunity to show highly targeted ads to individuals already close to the product purchase decision. This gives them a higher return on investment on ad-spend as opposed to advertising to cold or merely interested…