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Ethereum Lending

What is the LQTY token used for?

What is LQTY


LQTY the staking token of Liquity. It is not a governance token.

LQTY token is used for


  • Earn fees from issuance and redemptions of loans.

How could value accrue to LQTY token


Potential

Liquity incentivizes 3rd parties to run frontends. Potentially an interesting bootstrap for marketing/community.

Locking tokens

  • Staking.

Fees

  • Revenue to token holders when staking LQTY.

What is Liquity


Liquity is a lending protocol with a stablecoin called LUSD.

How it works


Deposit ETH (only asset right now) and borrow LUSD with 110% collateral ratio.

Users can deposit LUSD in the stability pool to earn collateral from liquidations. The liquidity pool is the backstop for the system.

  • When a position drops below 110% collateral the protocol will instantly liquidate it using the stability pool if needed.
  • In return the stability pool providers will receive the liquidated collateral which should equal more than the LUSD lost.

Governance

  • Liquity has no governance.

Rewards

Users earn from liquidations and LQTY rewards when providing LUSD to stability pool.

Frontends

  • Frontends are run by 3rd party operators. The operator sets a kickback rate on the liquidations and fees to the user.

Oracle

Liquity uses Chainlinks ETH/USD price and Tellor as a backup oracle.

A thorugh breakdown is found in the developer github.

Token issuance


Total Supply: 100,000,000

  • 32% – Rewards
  • 1.33% -LP Rewards
  • 2% – Community reserve
  • 23.7% Team and advisors
  • 33.9% Investors
  • 6.1% Liquity AG endowment
  • 1% Service providers


All team and investors tokens are locked for 1 year. See breakdown of issuance.

Docs


Similar projects


Token price


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