Liquity USD

Liquity USD (LUSD) is a stablecoin pegged to the US dollar, used for loan disbursements on the Liquity protocol. It's always redeemable for its equivalent value in collateral. To obtain a loan, you initiate a Trove and deposit a specified amount of Ethereum (ETH) as security, then borrow LUSD up to a collateral ratio of 110%.

The Liquity protocol is a decentralized platform offering interest-free loans backed by Ether collateral. To secure these loans, Liquity maintains a Stability Pool filled with LUSD, and borrowers serve as guarantors for any outstanding debt. As of now, the total value locked (TVL) in the protocol exceeds $642 million.

Liquity was founded by Robert Lauko, who also leads research efforts. His background is rooted in traditional finance, focusing on algorithms, network monitoring, and scaling challenges.

Rick Pardoe, co-founder and Lead Engineer at Liquity, has academic qualifications in Physics and Economics.

Michael Svoboda, currently serving as CEO at Liquity, has previously held CEO and COO positions in various blockchain firms. He holds degrees in computer science and economics.

According to its official documentation, Liquity is designed as a 'non-custodial, immutable, and governance-free' protocol, aimed at building a decentralized, efficient means of borrowing stablecoins.

Through the Liquity protocol, users can obtain interest-free loans with less collateral compared to other systems. Instead of selling Ether for cash, the protocol lets you secure your Ether and borrow LUSD against it, which can be paid back later.

LUSD can also be used as collateral to borrow Ether, which can then be sold to buy more Ether—a process that can be repeated.

Additionally, users can earn LQTY by depositing LUSD into the Stability Pool, supporting the pool through their interface (Liquity Protocol lacks its own frontend, relying on external providers), and contributing liquidity to the LUSD:ETH Uniswap pool.

Liquity offers interest-free borrowing, with stability maintained through dynamic borrowing and withdrawal fees that adjust automatically based on activity. When withdrawals are frequent, the borrowing fee increases to deter further loans.

Unlike systems like MakerDAO that use fluctuating interest rates to regulate borrowing, Liquity employs a decentralized, direct feedback mechanism with one-time fees. This method allows borrowers to anticipate costs upfront, eliminating the need for complex governance processes.

Presently, the circulating supply of LUSD is 92,482,286 tokens.

LUSD is an ERC-20 token on the Ethereum blockchain, secured by the Proof-of-Stake (PoS) consensus mechanism. Validators must stake 32 ETH to participate in consensus and transaction validation.

LUSD is available on centralized exchanges such as Binance, Coinbase, KuCoin, Gemini, Gate.io, OKX, and more. It can also be traded on decentralized platforms like Uniswap (V3), Balancer (V2), and others.

To monitor live prices of LUSD, you can use the CMC mobile app.