Liquidity is a decentralized borrowing protocol that allows users to use their ETH to take out an interest-free loan, while maintaining full exposure to ETH. Loans are paid out in LUSD, a stablecoin solely backed by ETH. With Liquidity, users can borrow up to 90% of their ETH value with no payback time attached and just a one-time fee as low as 0.5%. They can use the borrowed funds to buy real-world assets or pay for their daily expenses while keeping their ETH stack intact. The platform is fully decentralized and immutable, providing the highest safety ratings in the space.
The protocol was launched in 2021 by Michael Svoboda, Robert Lauko, and Rick Pardoe. It receives support from various big firms like Tomahawk VC, Pantera, Synthetic, Coinbase, Gemini, Huobi, etc. The platform currently enjoys more than $600 million in TVL.
How Liquity (LQTY) Works
Liquity has four main use cases: borrowing LUSD against ETH, providing LUSD to the Stability Pool in exchange for rewards, staking LQTY to earn a portion of fee from borrowing or redeeming LUSD, and redeeming 1 LUSD for 1 USD worth of ETH when the price of LUSD falls below $1.
The protocol has two tokens: LUSD, the USD-pegged stablecoin used to pay out loans, and LQTY, the token that captures the platform’s fees and gives them to early adopters and users.
Liquity charges a one-off fee whenever LUSD is borrowed and redeemed. This fee is adjusted dynamically based on the redemption volumes.
How Many Liquity (LQTY) Tokens Are in Circulation?
LQTY token has a total supply of 100,000,000, among which 90,938,871 tokens are being circulated.
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Liquity (LQTY) Resources
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