Tuesday, November 5, 2024

Liquity To Launch New CDP Stablecoin Protocol In Late 2024

Liquity to introduce LST help and dynamic user-set rates of interest in bid to drive progress.

Liquity, the challenge behind the LUSD decentralized stablecoin, will launch a newly redesigned protocol this yr.

On Feb. 15, Liquity introduced plans to launch a revamped collateralized debt protocol (CDP) searching for to deal with the shortcomings encountered by its present providing lately.

Liquity’s new protocol will introduce a number of new options, together with help for liquid staking tokens (LSTs) as collateral, and new mechanisms designed to keep up LUSD’s peg to the greenback. Liquity can even debut dynamic “user-set rates of interest” alongside a brand new liquidation system that can prioritize pressured redemptions for customers paying decrease charges.

“We’re strongly satisfied that the introduction of this new DeFi primitive, centered on user-driven rates of interest, not solely enhances its direct attraction to customers but additionally opens doorways for builders and protocols,” Liquity stated. “By selecting greater rates of interest, debtors can scale back the chance of being affected by redemptions, thereby aligning their particular person incentives with the stablecoin peg dynamics of the system.”