fluidkey

How do you build a stablecoin that isn’t controlled by one entity?

This week we’re highlighting @liquityprotocol, a decentralized stablecoin and lending protocol backed by ETH

More below!

Be $BOLD • The best way to borrow with (staked) ETH • Community: /liquity

BOLD Stablecoin

Liquity’s stablecoin, BOLD, maintains its peg to $1 by locking up users’ ETH and liquid staking tokens

Anyone can redeem BOLD for $1 of ETH from the protocol 

If BOLD trades below $1, traders can simply buy cheap BOLD, redeem it for $1 of ETH, and push the price back up

So whose ETH is being redeemed in this scenario? 

Liquity is also a lending protocol: it lets users borrow BOLD against their ETH

Redemptions come from the collateral of the lowest-rate borrowers

Most stablecoins today are managed by a centralized entity that issues the stablecoin against dollars it holds, think USDC or USDT

Liquity’s design is permissionless, immutable, and backed only by crypto assets