Decentralized lending protocol Liquity launches on the Ethereum mainnet
April 5, 2021, 10:00AM EDT
1 min read
Decentralized borrowing protocol Liquity is now live on the Ethereum mainnet.
The launch comes a week after the startup raised $6 million in a Series A round led by investment firm Pantera Capital with participation from Nima Capital, Alameda Research, and several others.
Founded in January 2020, the Ethereum-based lending protocol allows users to draw loans against ETH with a minimum collateralization ratio of 110% — lower than the 150% ratio required for MakerDAO — and does not charge a recurring "stability fee" the way Maker does.
Loans are issued in LUSD, a USD-pegged stablecoin. Users can deposit LUSD to a "stability pool" to earn rewards in ETH and LQTY, the protocol's token. All of the protocol's operations are algorithmic and fully automated, minimizing the need for governance.
"We believe Liquity will unlock a whole suite of new capabilities for DeFi users, and is pushing the space forward with their unique 'governance-light' protocol approach," said Polychain co-founder and CEO Olaf Carlson-Wee in a statement. Polychain, which is Liquity's biggest investor.
Disclosure: Pantera was an investor in a past funding round for The Block.
The Block Research was commissioned by Algorand to create Layer-1 Platforms: A Framework for comparison, which provides a “look under the hood” at seven platforms: Algorand, Avalanche, Binance Smart Chain, Cosmos, Ethereum/Ethereum 2.0, Polkadot, and Solana.
We assess their technical design, related ecosystem data, and qualitative factors such as key ecosystem members to get an understanding of how they differ. Having done this analysis, we draw some insights for what the future of the broader smart contract landscape could look like for years to come.