Liquity: The Decentralized Borrowing Protocol
Liquity is a decentralized borrowing protocol that allows you to draw interest-free loans against Ether used as collateral. In addition to the collateral, the loans are secured by a Stability Pool containing LUSD and by fellow borrowers collectively acting as guarantors of last resort. Liquity as a protocol is non-custodial, immutable, and governance-free.
We chatted about how the protocol is built and the mechanisms used, how to borrow, and the stability pool and liquidations.
Topics:
- Robert and Kolten's backgrounds and how they got into crypto
- What led Robert to create Liquity
- What Liquity is and the liquidation mechanism used
- The function of the stability pool
- The process of existing troves taking on the debt of undercollateralized troves
- Liquity vs Compound & MakerDAO
- LUSD redemptions
- How the Recovery mode works
- The purpose of the LQTY token
- How the algorithmic monetary policy works
Links:
Zubin Koticha, Sunny Aggarwal