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
Liquity incentivizes 3rd parties to run frontends. Potentially an interesting bootstrap for marketing/community.
- 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.
- Liquity has no governance.
Users earn from liquidations and LQTY rewards when providing LUSD to stability pool.
- Frontends are run by 3rd party operators. The operator sets a kickback rate on the liquidations and fees to the user.
A thorugh breakdown is found in the developer github.
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.