Decentralized borrowing protocol Liquity is now live on the Ethereum mainnet.
The launch comes a week after the startup raised $6 million in a Series A round led by investment firm Pantera Capital with participation from Nima Capital, Alameda Research, and several others.
Founded in January 2020, the Ethereum-based lending protocol allows users to draw loans against ETH with a minimum collateralization ratio of 110% — lower than the 150% ratio required for MakerDAO — and does not charge a recurring “stability fee” the way Maker does.
Loans are issued in LUSD, a USD-pegged stablecoin. Users can deposit LUSD to a “stability pool” to earn rewards in ETH and LQTY, the protocol’s token. All of the protocol’s operations are algorithmic and fully automated, minimizing the need for governance.
“We believe Liquity will unlock a whole suite of new capabilities for DeFi users, and is pushing the space forward with their unique ‘governance-light’ protocol approach,” said Polychain co-founder and CEO Olaf Carlson-Wee in a statement. Polychain, which is Liquity’s biggest investor.
Disclosure: Pantera was an investor in a past funding round for The Block.