As Kriptokoin.com, in this article, we will examine Liquity (LQTY), which serves as a borrowing protocol. You can find answers to questions such as what is liquidity, what is the aim of the project, where and how to buy LQTY coin in the following sections of the article.
What is liquidity?
Built on the Ethereum blockchain, Liquity is a decentralized protocol that lends LUSD in exchange for Ethereum. LUSD is a stable coin whose price is indexed to the US dollar. Users can get interest-free loans through the protocol. Loans require a 110% collateral rate, which is very useful. In addition, the project has managed to become one of the leading protocols in the DeFi field with the features it offers.
Liquidity plays an important role in DeFi. Borrowing is an important component that contributes to liquidity in this area. In this context, the protocol is a project that can multiply in value as the DeFi field grows. Gaining wider adoption of the project in the industry could enable LQTY coin to start a bullish move.
What is LQTY coin?
LQTY acts as the native cryptocurrency of the Liquity protocol. The project allows investors to borrow LUSD instead of selling their ETH holdings. This feature helps users pay off their loan more easily. The only collateralized crypto asset that the protocol currently lists is Ethereum.
What are the advantages?
The protocol grants early adoption rewards to new LQTY holders. Also, the fact that the project is a debt protocol makes it a safe haven for investors during times of fear when market volatility is high.
In addition, LQTY coin holders have the opportunity to earn passive income by staking their holdings. This stands out as a feature that facilitates the adoption of the token.
What are the disadvantages?
The number of debt protocols in the DeFi field is quite large. The high number of projects in the field increases the competition. The LQTY protocol may be overshadowed by its competitors in the future. This, in turn, can negatively affect the price of the token.
LQTY coin has high volatility like other cryptocurrencies. High volatility means that an asset’s value fluctuates over a wider range, both in the bullish and bearish directions. Also known as volatility, this can cause users to avoid investing, which can lead to a drop in the token price.
What is liquidity? Where and how to get Liquidity (LQTY)?
Liquidity (LQTY) coin is listed by some crypto exchanges. Investors interested in the token must be a member of a crypto exchange where the token is listed. These exchanges include Coinbase, Uniswap (V3), MEXC, AEX, Uniswap (V2). Investors who verify their account after becoming a member can purchase LQTY by depositing a fiat currency such as lira to the stock market.
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