Researcher Lauko has designed a new Ethereum-based loan agreement that promises to redeem stablecoins completely

Robert Lauko, a former blockchain researcher at the decentralized computing platform Dfinity, designed an Ethereum-based loan agreement called “Liquity” that promises to redeem stablecoins completely. The agreement will create a stable currency “LQTY” against the US dollar. Unlike other centralized stablecoins, LQTY can completely redeem the underlying collateral at face value. Liquity supports its stablecoin through algorithm-adjusted redemption and loan issuance fees. Both fees are initially set to 0%, but will increase as the redemption amount increases, and the fee tends to zero when there is less redemption activity. Lauko stated that the system allows Liquity to set its minimum collateral ratio well below 110% of MakerDAO. In addition, its team is now ending the development of core system functions and plans to review it as soon as possible. Liquity has already raised a small seed round in Switzerland, where its headquarters is located, and the company is currently seeking to raise more funds. An early developer of Liquity was Ashleigh Schap (previously engaged in business development at MakerDAO).