Liquity is a decentralized borrowing protocol that offers unprecedented benefits for borrowers.
Liquity's secondary token, LQTY, is not a governance token. Instead, it is used to capture 100% of the revenue generated by the Liquity protocol. This revenue is distributed to all stakers of LQTY.
Liquity captures the revenue from the borrowing and redemption fees and pays it out on a pro rata basis to the stakers of the LQTY token. The tokens can be staked and unstaked any time with no minimum lockup period.
Staked LQTY are not used to backstop Liquity and are not used for governance, making LQTY's staking mechanism easy to reason about when compared to other DeFi protocols.