Liquity: The Decentralized Borrowing Protocol

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:

Hosts:Zubin Koticha, Sunny Aggarwal