The Block • Sep 25, 23
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Sum of median estimated savings and rewards earned, per user in 2021 across multiple Coinbase programs (excluding sweepstakes). This amount includes fee waivers from Coinbase One (excluding the subscription cost), rewards from Coinbase Card, and staking rewards.
The price of Liquity has risen by 5.49% in the past 7 days. The price increased by 1.14% in the last 24 hours. In just the past hour, the price grew by 1.44%. The current price is $0.86 per LQTY. Liquity is 98.63% below the all time high of $62.97.
The current circulating supply is 93,539,632.58 LQTY.
LQTY is an Ethereum token that powers the Liquity protocol, a decentralized borrowing platform for 0% interest loans using ETH as collateral. Loans are paid out in a stablecoin called LUSD, and LQTY holders can stake their token to earn a portion of fees generated by opening and closing loans.
is a decentralized borrowing that allows users to draw loans with any interest against Ether token used as collateral. In simple words, the platform provides loans to individuals in exchange for Ether tokens present with them. On the platform, loans are paid out using LUSD tokens. is the USD-pegged that can be redeemed at any time against the underlying collateral at face value. This means that the users can easily convert the LUSD tokens into traditional currency at any given time.
Further, LUSD needs to maintain a minimum collateral ratio of 110%. Users can lock up Ether on the Liquity platform, then issue LUSD to their own address, and subsequently transfer those tokens to any other Ethereum address as well. Next, a is where the user can take out and maintain their loan. Each Trove is linked to an Ethereum address, and each address can have just one Trove. To put simply, Trove is an account that keeps the record of ETH as well as the debt given in the form of LUSD.
Primarily, uses the LUSD in the Stability Pool to absorb the undercollateralized debt, i.e., to repay the liquidated borrower's liability. The Stability Pool maintains the system's solvency as the first line of defense. The platform achieves solvency by acting as the liquidity source to repay debt from liquidated Troves and ensuring that the total supply remains backed up. Further, the Stability Pool is funded by users (stability providers) transferring LUSD. Over time, while gaining a pro-rata share of the liquidated collateral, stability providers lose a pro-rata share of their LUSD deposits as well.
According to the , collateralized debt platforms do not rely on lenders to provide liquidity and generate free liquidity with no refinancing costs. Yet, most charge recurring fees for borrowing. The variable fees (stability fees) correspond to an interest rate in traditional banking, have an indirect impact on monetary supply, and are rather ineffective in the short term. Short-term speculators and leverage seekers might not be greatly affected by interest rates, but existing borrowers may not have the means to repay their loans as an immediate reaction to rising interest.
In addition to charging stability fees, existing platforms require the individual borrower’s position to be overcollateralized. This is due to the liquidation mechanisms they apply to a borrower that become undercollateralized. Overcollaterization makes the borrower’s capital inefficient. Furthermore, both collateral auctions and fixed-price selloffs have turned out to be inefficient by design, leaving room for improvement.
Finally, -backed stablecoins are not redeemable at face value, and due to the lack of direct arbitrage cycles, they cannot guarantee a hard price peg as well. Thus these coins are usually subject to higher price volatility than traditional currency-backed stablecoins. Instead, the systems rely on a soft peg mechanism that is less effective, stabilizing the exchange rate by making the loans more or less attractive through variable fees.
Liquity improves upon the above-mentioned issues by offering the following key benefits:
Low collateral ratio (110%)
Hard price floor
Governance-free algorithmic monetary policy
Notably, LQTY is the secondary token issued by Liquity and incentivizes early adopters and frontends. Frontend Operator provides a web interface to the end user. This further enables them to interact with the protocol. LQTY rewards will only accrue to Stability Providers, users depositing to the Stability Pool, frontends facilitating those deposits, and liquidity providers of the LUSD:ETH pool.
and Rick Pardoe are the founders of Liquity. Lauko is the CEO and was previously a researcher at DFINITY. Pardoe is the lead engineer and is a Solidity. Michael Svoboda is the COO and was previously CEO and COO at several blockchain companies.
LQTY holders can stake their tokens on the platform to earn the fees generated by LUSD redemptions and loan issuance. The process of redemption involves exchanging LUSD for ETH at face value. Anytime, users can redeem their for ETH without limitations. However, there may be a redemption fee on the redeemed amount.
To start , the user needs to deposit the LQTY token to the Liquity staking contract. Once done, the user will start earning a pro-rata share of the borrowing and redemption fees in and ETH. The LQTY stake will earn a fee share equal to the share of the total LQTY staked at the instant the fee occurred. Only LQTY tokens can be staked on the platform, and LUSD can be deposited into the Stability Pool instead.
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The current market cap of Liquity is $80.74M. A high market cap implies that the asset is highly valued by the market.
The all-time high of Liquity is $62.97. This all-time high is highest price paid for Liquity since it was launched.
Over the last 24 hours, the trading volume of Liquity is $11.34M.
The current circulating supply of Liquity is 94 million.
The median time that Coinbase customers hold Liquity before selling it or sending it to another account or address is 6 days.
Liquity ranks 171 among tradable assets on Coinbase. Popularity is currently based on relative market cap.
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