Coin Liquity (LQTY) is the utility token of the Liquity protocol, a decentralized borrowing platform that allows users to borrow the stablecoin LUSD using ETH (Ethereum) as collateral, with zero interest.
Here are the key points about Liquity and the LQTY token:
1. Stablecoin LUSD: Users can borrow LUSD by depositing ETH as collateral. LUSD's value is kept close to $1.
2. Zero interest (0% interest): Unlike other lending platforms, Liquity does not charge interest. There is only a one-time fee when borrowing.
3. Over-collateralized: Loans must be backed by collateral of more than 110% of the loan value in the form of ETH.
4. LQTY Token:
Used for staking and earning a share of the fees collected by the protocol.
Not a governance token — Liquity is intentionally designed as a protocol without governance, meaning its main parameters cannot be changed by community voting.
5. Decentralization and censorship-resistant: Liquity operates entirely on the Ethereum blockchain and is designed to be independent of third parties.