Hey everyone! Welcome to our monthly newsletter where we share updates regarding Liquity and our ecosystem on a regular cadence.

If you’d like these sent directly to your inbox, sign up for the mailing list on our website.

Development Updates

After the activation of the redemption mechanism, borrowers trying to open or adjust existing Troves have been facing frequent out-of-gas errors.

It’s a complex issue, so we will describe it in more detail in the future, but here’s the TLDR: Liquity’s smart contract stores Troves in a linked list in order of least collateralized to most collateralized, and when you adjust your…


crvLUSD Yearn Vault goes live, LUSD / 3Pool receives CRV rewards, Gnosis Safe adds Liquity support, and more.

Welcome to the Weekly Wrap Up, a weekly series where I go over all of the highlights in the Liquity ecosystem. This issue covers the week of 4/26–5/2.

What is Liquity? Liquity is a decentralized borrowing protocol that allows you to draw 0% interest loans against Ether used as collateral. Learn more.

This series originally started in our Discord, but after receiving community feedback we’ve decided to share it broadly. Weekly Wrap Up is a more frequent compliment to our monthly newsletter — subscribe to that here.

System Overview


Several months ago we worked closely with the Deep Work product studio on early designs for Liquity’s frontend Launch Kit. Due to time constraints, we didn’t implement them before our main net launch.

Since launch, the frontend landscape has evolved and many ecosystem participants have spun up their own frontends, with their own design choices and new features. Due to this dynamic, we won’t be implementing the Deep Work designs ourselves and will instead continue working on our subgraph to make it easier for frontends to display statistics as well as history views for Troves and deposits. However, it would…


Since launch, LUSD deposited to Liquity’s Stability Pool has continued to grow — recently crossing 1.1B deposited. As a result, we want new users and our community to fully understand the mechanisms at play.

In this post, I’ll be going over the basics of the Stability Pool, how it works, and some things to keep in mind when depositing.

What is the Stability Pool?

Liquity’s Stability Pool is the first line of defense in maintaining system solvency. In other words, the Stability Pool absorbs and cancels debt from defaulted (i.e. liquidated) Troves — a responsibility usually managed by collateral auctions in systems like MakerDAO.

How…


After launch, one common source of confusion we’ve seen is around Liquity’s redemption mechanism. Since LUSD redemptions were deactivated for 14 days post-launch, it seems like a good time to fill everyone in as we near the end of the grace period.

Before we get started, I’ll answer the most common question right away. No, redemptions are not the same as paying back your Trove’s debt. You can do that free of charge and debt repayment has been available since launch.

What are LUSD redemptions?

LUSD redemptions are one of Liquity’s most unique features. Simply put: The redemption mechanism gives LUSD holders the ability…


Liquity Protocol is officially live, Series A announcement, and more.

Hey everyone! Welcome to our monthly newsletter where we share updates regarding Liquity and our ecosystem on a regular cadence.

If you’d like these sent directly to your inbox, sign up here.

Development Updates

🚀 Liquity is now live on Ethereum main net!

As of yesterday (4/5), users can borrow LUSD against their ETH, deposit LUSD to the Stability Pool, earn LQTY rewards, stake LQTY, and stake Uniswap LUSD:ETH LP tokens to earn LQTY.

Find the full launch announcement here.

Before interacting with Liquity, please catch up by reading our FAQ and familiarizing yourself with a third party frontend — there’s some…


We are excited to announce that Liquity is now consuming the Chainlink ETH/USD Price Oracle on mainnet. This integration enables Liquity to fetch the most current ETH/USD price data as needed for core protocol functions such as opening Troves, triggering liquidations, or redeeming LUSD. Integrating the Chainlink ETH/USD decentralized data feed will ensure the safety and accuracy of prices referenced within Liquity, protecting users against downtime and various data manipulation attacks, such as those recently experienced in DeFi by flash loans.

How Liquity Provides Interest-Free Loans with Greater Capital Efficiency

Liquity is a decentralized borrowing protocol that allows users to draw interest-free loans against their ETH collateral, known as…


Last month we sponsored the Gitcoin Grants Round 9 hackathon where we made three bounties available with 4.8 ETH in prizes:

Today, we’re excited to announce the winners of each bounty!

Redemption Arbitrage Bot

The winner of the Redemption Arbitrage Bot bounty is chris124567. You can find their submission here.

It works by checking prices from the Uniswap pair and the Chainlink oracle every block. …


Info on Liquity’s upcoming launch.

TLDR;

  • Liquity’s launch date is set for April 5, 2021.
  • Our Ethereum deployment address is 0xa850535D3628CD4dFEB528dC85cfA93051Ff2984. Deployments from any other address should be deemed invalid — do not interact with them.
  • LQTY rewards will be live at launch.
  • There will be 100,000,000 LQTY tokens. Allocations and distribution methods can be found below.

Launch Details

It’s official: Liquity is set to go live on April 5, 2021. On launch day we’ll publish another announcement specifying Liquity’s contract addresses and how users may interact with the protocol.

Liquity has been in the works for a year and half — undergoing audits and economic simulations —…


Floating (i.e. variable) interest rates have become commonplace in the DeFi ecosystem for both borrowers and lenders. For the unfamiliar: Floating interest rates are interest rates that fluctuate due to market dynamics. Often times a protocol’s interest rate is managed algorithmically or through governance vote.

In this post I want to explore why protocols may charge interest, how floating interest rates can affect borrowers, and how Liquity replaces floating interest rates with a one time fee. Quick aside: This is written in the context of protocols that allow users to borrow a stablecoin against their collateral (e.g. Liquity, MakerDAO).

Why charge interest at all?

Protocols…

Kolten

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