The Liquidity USD network is a blockchain-based platform that aims to provide loans on liquidity protocols with its stable coin backing. The network is designed in such a way that its tokens can be redeemed at face value against the underlying collateral. However, to have access to the loans offered by the platform, the users are expected to have a Trove with the minimum deposit amount of ETH before they can gain access to the LUSD network, thus opening the users up to collateral ratios at 110%. The protocol, according to the team, is essentially a decentralized borrowing system that allows its users to draw 0% interest loans against the ETH tokens used as collateral.
The platform also allows users to deposit LUSD tokens to the Stability pool to qualify for rewards in the form of ETH and LQTY. Over time, as liquidation transactions are executed on the network, the LUSD balances are decreased in the stability pool. In return for this, the protocol provides the users with a pro-rata share of the liquidated ETH and LQTY, which serves as their rewards. While it offers several major use-cases to its users, holders of LQTY tokens also enjoy the ability to stake their coins for a portion of the borrowing and redeeming fees charged by the platform. These fees are mostly allocated to the staking contracts and then overtime, they accrue as ETH and LUSD.
Who are the Founders of Liquidity USD (LUSD)?
The Liquidity USD token Is a joint project that was established by Robert Laulo and Rick Pardoe. While both of them are the original founding partners, the organization has picked up several other gifted professionals over the years, but we’ll focus on the founders here.
Laulo obtained his first degree at EPFL (École Polytechnique fédérale de Lausanne), in Microengineering. Later he moved on to the University of Zurich and obtained two degrees in law with one being a Ph.D. after he was called to bar. He started his career as a research assistant, at the University of Zurich, before becoming a law clerk and then a legal counsel at Sunrise Communications AG. In 2017, he landed a job as a research associate at DFINITY and served for two years before leaving to co-establish and become the CEO of the Liquidity protocol.
The platform’s co-founder, Pardoe is also well-educated, holding numerous degrees. His first degree was a BSc in Physics, which he aced with distinctions. Later, he went back to school and obtained a master’s degree from the University of Nottingham and then developed a liking for the tech sector which led him to be part of the Bloc web development boot camp. After his education, he freelanced as an SEO consultant and web developer, and then he went on to work with ETHDevs.com, before confounding liquidity. Now, he serves as one of the core developers of the system with the job of ensuring the smooth operation of the network.
What is Liquidity USD (LUSD) used for?
With its stablecoin backing, the Liquidity USD network can offer participants of its network collateralized loans in the crypto space. In essence, Liquidity USD is a secondary token issued by the broad ecosystem of the liquidity protocol. The revenue is converted to the form of fees and is regenerated by the system, while it adds other incentives for frontend operators and early developers. The rewards issued by the platform also follow particular protocols that increase their accrual to stability providers, such as in the case of a user who deposits LUSD to the stability pool, and the Front-end developers who facilitate those deposits in the system including the Uniswap pools.
As a token on its own, the LUSD has a peg to the US Dollars, implying that it holds a value significantly close to the regular Dollar value. Due to this value, the token holders are presented with the opportunity of exchanging their LUSD tokens directly for fiat currencies or with other token pairs such as USDT.
What Is the Unique Point of Liquidity USD (LUSD)?
Apart from the reward and series of incentives provided for users by the Liquidity USD platform, there are also several other advantages enjoyed by the token holders. Essentially, the Liquidity platform is a decentralized borrowing protocol providing interest-free liquidity against Ether-based collateral. Through its use of a dedicated novel liquidation mechanism, as well as its leverage on an algorithmic monetary policy, the platform can offer a variety of unprecedented benefits for borrowers.
The network users are also allowed to draw the LUSD token as a stable coin on their collateral and by extension can enjoy liquidity free of charge, without any form of recurring cost. Because the protocol can generate LUSD tokens unanimously, it is not required to transfer any capital costs to the borrowers, and neither does its monetary supply relies on interest rates. However, the platform does take a one-time borrowing fee as a portion of the amount drawn. The fee rates on the other hand are dependent on the current base rate, a rate governed through an algorithm based on the volume of token redemption. In general, the platform has been successful so far in bridging the gap of collateralized liquidation available in the blockchain industry.
How many Liquidity USD (LUSD) coins are in circulation?
According to the white paper released by the Liquidation USD network, the platform has its maximum token supply pegged at 100,000,000 LUSD. Out of the total amount, the network has its circulating supply pegged at 719,446,095 LUSD.
Based on the token distribution mechanism of the platform, 32,000,000 tokens were allocated to the reward pool and can only be earned through stability pool deposits. Majorly, the network assigned a total of 35.3% to the liquidity part of its ecosystem. 23.7% was assigned to the team behind its creation and the advisors, investors were assigned 33.9%, and the Liquidity AG Endowment earned 6.1%. The leftover 1% was assigned to the service providers.
Is the Liquidity USD (LUSD) Network secured?
The Liquidity USD system was designed under ERC-20 token specifications, and as such, the system is under the same security protocol as the Ethereum blockchain.
The network has several nodes that are responsible for the protection of the platform against any form of fraudulent activity. As a blockchain, the Ethereum network can achieve this level of security through its dedicated proof of stake consensus algorithm. The procedure used here is one where the nodes are required to validate transactions before they can be added to the blockchain. Additionally, the nodes with the highest stakes are the deciding parties on the platform and as such need to make sure the platform is safe as their tokens are tied to its safety.
How do I buy Liquidity USD (LUSD)?
While there are several stablecoins pegged to the US Dollar or Gold currently available in the crypto world, it can’t hurt to have a few more available. While, this platform has the stablecoin advantage, the Liquidity USD’s offering of collateral-based liquidity is also from a unique standpoint than other regular offerings in the industry. As a result of this, its tokens have grown to become more accessible and largely available across different exchanges. To purchase these tokens, you’ll have to follow the steps below.
- Interested parties are required to create an account with the crypto trading platform.
- Then, they are required to transfer a specific amount of fiat money to the crypto account
- After they will have to wait till the transaction has been approved, they can now buy their LUSD tokens.
Which Cryptocurrency Wallet Supports Liquidity USD (LUSD)?
The PTPWallet platform supports many cryptocurrencies simultaneously such as Liquidity USD (LUSD). Because of its vast use case, it has grown to become one of the most used platforms as it serves as an exchange and an engine to discover other cryptocurrencies. Additionally, users can easily use PTPWallet as their LUSD wallet because it offers a simple and interactive interface making it easy for people to navigate its system.