Liquity

Overview

Liquity is a decentralized borrowing protocol that allows users to draw interest-free loans against Ether used as collateral. Loans are paid out in LUSD (a USD pegged stablecoin) and need to maintain a minimum collateral ratio of 110%.

Purpose and Utility

The LQTY token serves as the protocol's governance and revenue-sharing token. LQTY stakers receive protocol fees generated from borrowing operations and liquidations. The token also grants voting rights on protocol parameters.

Business Model Analysis

The core business model revolves around lending and borrowing operations, with revenue generation through fees. The protocol charges a one-time borrowing fee (which varies based on system conditions) and a liquidation fee. These fees are distributed to LQTY stakers.

Real-World Adoption

As of 2024, Liquity has over $400 million in Total Value Locked (TVL) and has processed billions in loan volume. The protocol maintains active development and community engagement.

Platform Development

The protocol demonstrates ongoing development activity with regular updates and improvements. The core team maintains transparency in their operations and development roadmap.

Token Distribution

LQTY had no pre-mine or ICO. The token distribution was designed to be fair, with tokens primarily distributed through protocol usage and development incentives.