Liquity (LQTY): Decentralized Borrowing with Zero Interest Rate
Since the rise of DeFi in 2020, decentralized lending and borrowing have become key areas in the industry. Users gained the ability to leverage their assets without selling them, accessing liquidity with minimal requirements. One of the most innovative solutions in this field is the Liquity (LQTY) protocol, offering collateralized ETH loans under unique conditions.
What Is Liquity?
Liquity is a decentralized borrowing protocol on Ethereum that allows users to take loans in the LUSD stablecoin, pegged to the US dollar. Its main advantage is a zero interest rate and minimal collateral requirements (only 110%).
Unlike traditional loans or even other DeFi protocols, Liquity is fully autonomous and requires no human intervention. All processes are governed by smart contracts with no control from the developers.
What Problems Does Liquity Solve?
- Cryptocurrency volatility: Collateral can lose value during market drops, but loans in LUSD are protected from price fluctuations since it’s a stablecoin.
- Centralized lending complexities: Liquity requires no documents, verification, or KYC — only ETH collateral.
- Full decentralization: After launch, the protocol operates without any developer interference. All parameters are fixed or managed algorithmically.
Advantages of Liquity (LQTY)
- 0% interest rate: In recovery mode, loans are interest-free.
- Minimum collateral 110%: Lower than most other protocols.
- No governance: No voting, interference, or changes — full autonomy.
- Algorithmic fee adjustments: One-time borrowing and redemption fee.
How Does Liquity Work?
- The user locks ETH into Liquity’s smart contract.
- Receives a loan in LUSD, pegged to USD, at 0% interest.
- Can use LUSD in DeFi, trade it, or hold it.
- The loan can be repaid anytime, and the collateral is returned.
The protocol uses two tokens:
- LUSD — stablecoin used for borrowing.
- LQTY — token for fee revenue distribution and user incentives.
Where to Buy Liquity (LQTY)?
- Coinbase — supports many countries including the US, Canada, and Europe.
- KuCoin — international trading with over 300 tokens.
- Uphold — suitable for US residents, offering easy crypto purchases.
Why Is Liquity Considered One of the Most Efficient Protocols?
Liquity requires no human intervention, has no admin keys, and is fully governed by code. This makes it one of the most decentralized and transparent solutions in DeFi.
- No updates or changes — stable systеm.
- Minimal fees optimized for long-term use.
- Simplicity and fairness through algorithmic control.
Conclusion
Liquity offers a unique opportunity to borrow with zero interest, minimal requirements, and full autonomy. It is ideal for those seeking decentralized, secure, and cost-effective borrowing in DeFi. AlwaysMoney.org recommends Liquity as one of the best options to leverage ETH without selling and avoiding risks associated with volatility.
Ready to try Liquity? Explore its features, connect your wallet, and experience a new level of decentralized borrowing!
Comparison of Liquity with Other DeFi Borrowing Protocols
| Parameter | Liquity | MakerDAO | Aave | Compound |
|---|---|---|---|---|
| Interest Rate | 0% | ~2.5% | ~3-12% | ~2-10% |
| Minimum Collateral | 110% | 150% | ~120-150% | ~120-150% |
| Admin Key | No | Yes | Yes | Yes |
| DAO Governance | No | Yes | Yes | Yes |
| Fees | One-time fee | Ongoing fees | Variable fees | Variable fees |
| Protocol | Ethereum | Ethereum | Ethereum + multichain | Ethereum + multichain |
Use Cases for LUSD
- Volatility protection: Hold LUSD instead of ETH during unstable market conditions to avoid losses.
- DeFi usage: Use LUSD in liquidity pools on Curve Finance, participate in farming, and earn extra income.
- Exchange to other stablecoins: LUSD can be easily swapped for USDT, USDC, DAI on decentralized exchanges (Uniswap, Curve).
- Invest without selling ETH: Access liquidity in LUSD while retaining ETH’s growth potential — without selling the asset.
- Debt repayment: Use LUSD to pay off other debts or join new DeFi projects.
Summary:
Liquity stands out from other DeFi protocols with its zero interest, minimal requirements, and full decentralization. LUSD is not just a stablecoin but a tool for stable income and capital protection.
Explore the opportunities of LUSD and become part of the next generation of finance with Liquity and AlwaysMoney.org.
