Liquity is a decentralized lending protocol that allows users to borrow against their Ether as collateral at 0% interest. Loans are denominated in LUSD, a stablecoin pegged to the US dollar, and require a minimum collateral ratio of just 110%. In addition to collateral, these loans are backed by Stability Pools containing LUSD and by other borrowers acting as last-resort guarantors.
The Liquity token, LUSD, is a fully redeemable stablecoin. At any time, holders may redeem LUSD tokens for the underlying ETH collateral based on the tokens face value, the current ETH:USD exchange rate, and the prevailing redemption rate. This allows for direct arbitrage whenever LUSD trades below $1, creating a price floor for LUSD.

The main benefits of Liquitys decentralized borrowing protocol are:
Interest-Free Liquidity
Ether holders can draw zero-interest loans in the form of LUSD, a stablecoin pegged to the US dollar.
Low Collateral Ratio
Thanks to an efficient instant liquidation mechanism, borrowers only need to maintain a collateral ratio of 110%.
Direct Redeemability
LUSD can be redeemed at par for the underlying ETH collateral.
Governance-Free
Price stability does not rely on human management but is achieved through protocol incentives and algorithmically adjusted redemption and loan issuance fees (defaulting to 0%).
Censorship-Resistant
Liquity is a protocol that is out of anyones control. Frontend operations are provided by third parties, which benefit from a unique decentralized incentive structure.
Growth Incentives
Early adopters who contribute to the systems stability while driving growth will receive attractive financial rewards.