The Anchor Token (ANC) is Anchor Protocol's governance token. ANC tokens can be deposited to create new governance polls, which can be voted on by users that have staked ANC.
ANC is designed to capture a portion of Anchor's yield, allowing its value to scale linearly with Anchor's assets under management (AUM). Anchor distributes protocol fees to ANC stakers pro-rata to their stake, benefitting stakers as adoption of Anchor increases -- stakers of ANC are incentivized to propose, discuss, and vote for proposals that further merit the protocol.
ANC is also used as incentives to bootstrap borrow demand and initial deposit rate stability. The protocol distributes ANC tokens every block to stablecoin borrowers, proportional to the amount borrowed.