Buy LQTY

What is Liquity (LQTY)?

Liquity (LQTY) is a decentralised borrowing protocol on Ethereum that allows users to take interest-free loans using Ether (ETH) as collateral. Loans are issued in LUSD, a USD-pegged stablecoin, with a minimum collateral ratio of just 110%. The protocol is designed to be fully decentralised, governance-free, and efficient for users seeking low-cost borrowing.

How does Liquity (LQTY) work?

Liquity operates using immutable smart contracts on the Ethereum blockchain, managing loans, collateral, and liquidations automatically. Borrowers deposit ETH as collateral to mint LUSD, which must maintain a 110% collateral ratio. The protocol includes three-tiered liquidation mechanisms:

• Stability Pool: Absorbs liquidated collateral.
• Debt Redistribution: Spreads liquidated debt among borrowers.
• Recovery Mode: Protects the system during low collateralisation levels.

Liquity's fully algorithmic approach adjusts fees dynamically and eliminates governance, ensuring a censorship-resistant platform.

What are the potential use cases for Liquity (LQTY)?

Liquity provides multiple applications for users and liquidity providers:

• Borrowing: Draw interest-free loans against ETH collateral.
• Stability Pool Rewards: Deposit LUSD into the Stability Pool to earn LQTY rewards.
• Staking: Stake LQTY tokens to earn protocol fees in LUSD and ETH.
• Trading: Use LUSD for trading or as a stable store of value.
• Liquidity Provision: Provide liquidity for LUSD on decentralised exchanges.

Industries such as DeFi, cryptocurrency lending, stablecoin ecosystems, and decentralised exchanges benefit from Liquity's features.

What is the history of Liquity (LQTY)?

Liquity was founded by Robert Lauko, a former DFINITY researcher, to address inefficiencies in DeFi lending protocols. The core team also includes Rick Pardoe (Lead Engineer) and Michael Svoboda (COO). Key milestones include:

• Launch: Deployment of the Liquity protocol on Ethereum.
• TVL Growth: Reached over $1 billion in Total Value Locked (TVL).
• Layer 2 Integration: Partnerships with Optimism and Arbitrum for scaling.
• Exchange Listings: LQTY token listed on platforms like Binance.

Notable Features and Partnerships

• Layer 2 Solutions: Integration with Optimism and Arbitrum to enhance scalability.
• Synthetix Collaboration: Supports sUSD price stability on Optimism.

Evolution of Liquity

Liquity has grown into a major DeFi protocol, with its TVL exceeding $642 million. It has maintained its focus on immutability, decentralisation, and governance-free operations, attracting widespread adoption. The LQTY token plays a critical role in the ecosystem, offering rewards and fee-sharing opportunities for stakers and liquidity providers.