Liquity protocol
Overview
Liquity is a decentralized borrowing protocol on Ethereum that allows users to draw interest-free loans against Ether (ETH) collateral, paid out in the protocol's stablecoin LUSD. Loans must maintain a minimum collateral ratio, and the protocol uses a Stability Pool and Redemption mechanism to maintain the LUSD peg and handle liquidations.
Within the DeFi Intel graph, Liquity connects to 2 tracked entities, most strongly to Liquity USD, Liquity BOLD.
Relations
Top connections in the DeFi Intel knowledge graph (confidence-weighted, 2 of 2 total).
| Relation | Connected entity | Confidence |
|---|---|---|
issues | Liquity USD | 95% |
issues | Liquity BOLD | 90% |
More on Liquity
Frequently asked questions
What is LUSD?
LUSD is Liquity V1's US-dollar-pegged stablecoin, issued to borrowers who deposit ETH collateral.
How were Liquity V1 loans interest-free?
V1 charged a one-time algorithmic borrowing fee, with a minimum of 0.5% in normal conditions, instead of accruing ongoing interest.
What changed in Liquity V2?
V2 introduced the BOLD stablecoin, user-set interest rates and support for multiple collateral assets including liquid staking tokens.
Related reading
Sources
Facts on this page were verified against the following sources.