Note: This article is from @bitouq Twitter, and MarsBit organizes it as follows:
Twitter can actually post long tweets, instead of the previous thread form, posting an article about the $LUSD protocol token $LQTY listed on Binance today.
I have liked and been optimistic about this protocol since a long time ago, but this wave has basically failed, so why are you optimistic about an agreement but do not hold its tokens?
1. $LUSD is currently one of the best solutions for decentralized collateralized Stablecoin. It has survived several ETH crashes relying on its multi-level liquidation mechanism.
2. The entire @LiquityProtocol protocol adheres to the concept of decentralization first. The role of $LQTY in the protocol is more like a functional token. Most of its functions are to stimulate the pledge of the Stability Pool, and it does not even have the function of a governance token.
3. Stability Pool is the first layer of liquidation guarantee of the agreement, so it is the key incentive object of the agreement, and most of the LUSD is basically pledged here except for the circulation in Curve. It is guaranteed, but the disadvantage is that it is not conducive to the external circulation of LUSD and indirectly affects the market adoption rate. But the team has also thought of various ways in this regard, such as its product @ChickenBonds .
4. The code of the entire protocol is extremely neat, and the core functions are basically not upgraded, but expanded and developed externally, so that the risk at the contract level is also reduced to a very low level.
To sum up, most of them are the advantages of $LUSD . At the beginning, I thought that the biggest advantage of this agreement was decentralization, but from the perspective of investment, its disadvantage is that it is too decentralized. Its protocol token $ LQTY has nothing to do with the value of the entire protocol, and has become a kind of "accessory" token, but it seems to be such an embarrassing situation for the Stablecoin track, such as another $ RAI protocol Tokens also do not capture any protocol value, and will eventually move toward minimal governance, thereby gradually weakening the existence of protocol tokens. In any case, Liquity is a delicate and beautiful protocol, really beautiful.
In the future, Stablecoin like $crvUSD and $GHO that already have an underlying ecology may break this deadlock, make stablecoin great again!
