Liquity is a decentralized borrowing protocol that offers unprecedented benefits for borrowers.
Liquity utilizes built-in algorithms to manage and dynamically update its adjustable parameters with no need for token voting and governance calls. The protocol has no admin key, and nobody can alter the rules of the system in any way. The smart contract code is completely immutable.
Unlike other DeFi protocols, Liquity does not rely on human governance to vote on monetary interventions. All protocol parameters are either preset and immutable or algorithmically controlled by the protocol itself — making human interventions redundant.
By measuring the redemption volumes and applying a time decay mechanism, it constantly adjusts the base rate, serving as a basis for both the borrowing and redemption fees.
Combining this governance-free nature with the one-time borrowing fee creates a predictable experience for users borrowing against their ETH.