Liquity (LQTY) is a decentralized borrowing and lending protocol built on the Ethereum blockchain. It aims to provide a stable and efficient platform for users to access loans and earn interest on their deposited assets. Liquity operates with a unique collateralization model called “Trove,” where users can lock up Ethereum (ETH) as collateral to borrow the protocol’s stablecoin called LUSD.
Who Are The Founders Of Liquity (LQTY)?
Liquity was indeed founded by Robert Lauko, who currently serves as the CEO of the platform. Before starting Liquity, Robert worked as a research associate at DFINITY. Together with Rick Pardoe, the lead project engineer, Robert founded Liquity after 18 months of continuous development.
During the early stages of Liquity, Robert secured $8.4 million in funding through three funding rounds, with Pantera Capital and Polychain leading the investments.
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What Makes Liquity Unique?
Unlike traditional lending platforms, Liquity does not employ a liquidation mechanism. Instead, users can pay back their debt or add more collateral at any time to avoid liquidation. This provides users with flexibility and reduces the risk of sudden liquidations.
Liquity offers interest-free loans to users. Borrowers only pay a one-time stability fee when they generate LUSD, making it an attractive option for users seeking low-cost borrowing.
Liquity utilizes a unique stability mechanism called the Stability Pool, which helps maintain the stability of the protocol. Users can deposit ETH as collateral and borrow LUSD (Liquity’s stablecoin). The Stability Pool automatically stabilizes the system by incentivizing users to repay their debt or deposit more collateral when the protocol becomes unstable.
How Many LQTY Tokens Are There in Circulation?
According to data from coinmarketcap, the total supply of LQTY tokens is 100,000,000, and there are currently 92,159,773 LQTY tokens in circulation.
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How Is Liquity Network Secured?
Overcollateralization: Overcollateralization is a common security measure used in DeFi lending protocols. It helps to protect lenders from losses in the event that a borrower defaults on their loan. In the case of Liquity, borrowers must deposit 1.1 ETH worth of collateral for every 1 ETH that they borrow. This means that even if the value of ETH falls by 10%, lenders will still be able to recover their full loan amount.
Liquidation Mechanism: Liquidation is a process that is used to recover collateral from borrowers who default on their loans. In the case of Liquity, liquidations are triggered automatically when a borrower’s collateral falls below 110% of their loan. Once liquidation is triggered, the protocol will begin liquidating the borrower’s collateral. The proceeds from the liquidation will then be used to repay the loan.
Audits: Audits are a process that is used to identify and fix security vulnerabilities in software. Liquity has been audited by a number of reputable security firms, including CertiK and Quantstamp. These audits have found no critical security vulnerabilities in the Liquity protocol.
How Can Crypto Investors Use Liquity (LQTY) Tokens?
There are a number of ways that crypto investors can use Liquity (LQTY) tokens. Some of the most common ways include:
- LQTY tokens can be used to yield farm on a number of DeFi platforms.
- LQTY tokens can be staked to earn rewards. Staking helps to secure the Liquity network and to incentivize users to participate in it.
Where Can You Buy Liquity (LQTY) Tokens?
There are a number of exchanges where you can buy Liquity (LQTY) tokens. Here are some of the most popular exchanges:
Is LQTY a good cryptocurrency?
Assessing whether a coin is considered a good cryptocurrency is subjective and depends on individual opinions. However, it is worth noting that the team behind Liquity has remained committed to the project’s original purpose.