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Liquity — Weekly Wrap Up #16
September 13, 2021
Welcome to the Weekly Wrap Up, a weekly series where I go over all of the highlights in the Liquity ecosystem. This issue covers the week of 9/6–9/12.
What is Liquity? Liquity is a decentralized borrowing protocol that allows you to draw 0% interest loans against Ether used as collateral. Learn more.
Last week was Liquity’s second biggest week of liquidations (in terms of value) since launch, though it paled in comparison to the 5/19 market crash. The market took some riskier Troves down with it on 9/7 when ETH quickly dropped from ~$3,900 to ~$3,000. After the dust settled, three Troves and a total of 3,840 ETH were liquidated.
With the market continuing to press downward, users are starting to pay off their debts (burn LUSD) to secure their positions. The market has quickly pivoted from risk on to risk off.
I highlighted in the last Weekly Wrap Up that LUSD’s Curve 3Pool was starting to eat into the Stability Pool’s market share and that continues to be the case. Stability Pool utilization is now at an all time low of 75.9% and the Curve pool has climbed to 21.9%.
The LUSD / WETH pool on Sushiswap has been added to the Onsen rewards program. Users can now provide liquidity and earn SUSHI rewards. Add liquidity here.
OlympusDAO has an OIP to add LUSD to their treasury as a hedge against centralized stablecoin risk. Users will be able to purchase OHM bonds with LUSD and (in the near future) earn LQTY and OHM rewards from an LUSD-OHM pool on Sushiswap. Read the proposal here.