Liquity USD, also known as LUSD, is a revolutionary stablecoin in the cryptocurrency market. Operated by the Liquity Protocol, it is a fully redeemable stablecoin that maintains a 1:1 peg to the US dollar. The unique selling proposition of Liquity's protocol lies in its ability to facilitate decentralised borrowing with 0% interest against Ether, which is used as collateral.
Understanding the Liquity Protocol
The Liquity Protocol is a decentralized borrowing system that enables users to secure loans without any interest by utilizing Ether as collateral. These loans are disbursed in LUSD, and borrowers are required to maintain a minimum collateral ratio of just 110% - a far more beneficial ratio than many traditional lending platforms.
Liquity's Stability Pool and Borrowing Security
Integral to the safety and security of the Liquity protocol is its Stability Pool. This pool consists of LUSD and acts as a protective measure against loan default. In addition to this, the protocol also relies on the collective action of borrowers who act as last-resort guarantors, thereby further promoting stability and trust within the network.
A Non-Custodial, Immutable, and Governance-Free Protocol
One of the notable features of the Liquity protocol is its non-custodial nature. This means that users have full control and ownership of their assets, without the need for a third-party intermediary. The protocol is also immutable, meaning no changes can be made once a transaction has been confirmed. Additionally, Liquity operates without a governance model, encouraging decentralisation and user autonomy in the truest sense.
Liquity USD social statistic
51,763
Twitter followers
0
Telegram members
0
Reddit subscribers
0
Facebook likes