LUSD Liquity USD Rank #668

Liquity USD (LUSD) is a USD-pegged stablecoin issued by the Liquity Protocol, a decentralized, non-custodial borrowing system. It allows users to draw interest-free loans by locking Ether as collateral, with loans disbursed in LUSD against a minimum collateral ratio of 110%. Because the protocol charges no interest, the borrower's only ongoing cost is a small, one-time fee paid in LUSD at loan origination. The token's peg is maintained through a Stability Pool, where users deposit LUSD to absorb liquidated debt in exchange for discounted collateral. Borrowers who fall below the collateral threshold are liquidated, and the system relies on fellow borrowers to back each other's positions rather than relying on governance or centralized administration. The protocol is immutable and operates without any form of governance, meaning its rules cannot be changed once deployed. LUSD is deployed across multiple networks, including Ethereum, Polygon, Arbitrum, Optimism, zkSync, and Base, where it functions as a crypto-backed stablecoin for use within decentralized finance applications.