What is Liquity?

Liquity is a decentralized borrowing protocol that allows you to draw interest-free loans against Ether used as collateral. Loans are paid out in LUSD (a USD pegged stablecoin) and need to maintain a minimum collateral ratio of 110%.

Both EARN Protocol and Liquid Loans are based on the Liquity code, providing the exact same capabilities but using PLSX and PLS as collateral, respectively.

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. Learn more about these mechanisms in our documentation.

Liquity as a protocol is non-custodial, immutable, and governance-free.

Liquity's key benefits include:

• 0% interest rate — as a borrower, there’s no need to worry about constantly accruing debt

• Minimum collateral ratio of 110% — more efficient usage of deposited ETH

• Governance free — all operations are algorithmic and fully automated, and protocol parameters are set at time of contract deployment

• Directly redeemable — LUSD can be redeemed at face value for the underlying collateral at any time

• Fully decentralized — Liquity contracts have no admin keys and will be accessible via multiple interfaces hosted by different Frontend Operators, making it censorship resistant

What are the main uses for Liquity?

• Borrow LUSD against ETH by opening a Trove

• Secure Liquity by providing LUSD to the Stability Pool in exchange for rewards

• Stake LQTY to earn the fee revenue paid for borrowing or redeeming LUSD

• Redeem 1 LUSD for 1 USD worth of ETH when the LUSD peg falls below $1