As of 4/5/21, there are more deposits than loans in Anchor. This is despite the fact that borrowers are paid Anchor tokens as a sweetener to take out a loan. Eventually, this sweetener will run out and so the challenges of attracting borrowers will only get more difficult with time. It is worth planning ahead on how to sustainably entice enough borrowers into the system to keep generating the revenue needed to offer a compelling high-yield product for savers.
Relatedly, the yields on different POS tokens are not the same so the implicit cost to the borrower (the foregone yield on collateral) varies by token. The consequence might be that Terra will have a harder time attracting borrowers from the highest yielding tokens v. the lowest yielding tokens.
One potential solution for both problems is to enable a “rebate” on high-yielding POS assets that are submitted as collateral for borrowing. A simple example. DOT yields about ~13%. ETH 2.0 yields ~8%. Anchor could offer the DOT owner a rebate of 5% such that the cost of borrowing in DOT is the same as the cost of borrowing in ETH (in terms of foregone POS yield on collateral). Assume a 33% LTV for the DOT borrower and this rebate is equivalent to a 15% yield on their loan. So from a marketing perspective, the borrower with DOT collateral is getting PAID 15% on their loan, and the borrower with ETH collateral is getting an interest free loan.
In short, there is a sustainable “sweetener” to entice owners of higher-yielding POS tokens to come to the Terra ecosystem to borrow against their assets. This helps sustain the engine that drives the yield for savers looking for an attractive but safe return. Growth of demand for UST for savings is obviously good for Luna.