Liquity Decentralized Borrowing Protocol is now live on the Ethereum mainnet.
The launch comes a week after the startup’s lifting $ 6 million in a Series A led by the investment firm Pantera Capital with the participation of Nima Capital, Alameda Research and several others.
Founded in January 2020, the Ethereum based loan protocol allows users to draw loans against ETH with a minimum collateral ratio of 110% – lower than the 150% ratio required for MakerDAO – and does not charge a recurring “stability fee” like Maker does.
Loans are issued in LUSD, a USD indexed stablecoin. Users can deposit LUSD into a “stability pool” to earn rewards in ETH and LQTY, the protocol token. All protocol operations are algorithmic and fully automated, which minimizes the need for governance.
“We believe Liquity will unlock a whole suite of new capabilities for DeFi users, and move the space forward with its unique ‘governance-light’ protocol approach,” said Olaf Carlson-Wee, Co-Founder and CEO of Polychain in a press release. Polychain, which is Liquity’s biggest investor.
Disclosure: Pantera was an investor in a previous round of funding for The Block.