Liquity is a decentralized borrowing protocol that allows you to draw 0% interest loans against Ether used as collateral. Loans are paid out in LUSD - a USD pegged stablecoin, and need to maintain a minimum collateral ratio of only 110%.In addition to the collateral, the loans are secured by a Stability Pool containing LUSD and by fellow borrowers collectively acting as guarantors of last resort. Learn more about these mechanisms under Liquidations. Liquity as a protocol is non-custodial, immutable and governance-free.
Users can Open a Trove to mint LUSD debt against their ETH and deposit LUSD to the Stability Pool and earn liquidation gains and LQTY rewards. Also can stake LQTY and earn the revenue from issuance fees (in LUSD) and redemption fees (in ETH). Liquity has a solid dev team with great quality code and technical documentation. Liquidity core innovation is the liquidation mechanism which is based on incentivized stability deposits and a redistribution cycle from riskier to safer troves. This provides stability at a much lower collateral ratio than current system.