Decentralized Borrowing Protocol Liquity’s LQTY Token Soars Amid USDC Chaos

The price increase of LQTY comes amid heightened interest in stablecoins following the depegging of USD Coin and the shutdown of several crypto-friendly banks.

AccessTimeIconMar 14, 2023 at 6:11 p.m. UTC
Updated Mar 14, 2023 at 6:30 p.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global event for everything crypto, blockchain and Web3.Register Now

LQTY, native token for decentralized borrowing protocol Liquity, has gained massive interest following the chaos from the depegging of the second largest stablecoin by market capitalization, Circle’s USDC.

The price of LQTY, the secondary token for decentralized borrowing protocol Liquity, was up nearly 20% in the past 24 hours – placing it among the best-performing crypto assets for the period. Moreover, LQTY has soared nearly 500% since the start of the year and was trading around $3.33 at presstime.

( and CoinGecko)
( and CoinGecko)

The most recent price action came after investors balked at Circle’s USDC stablecoin. The dollar-pegged crypto’s loss (whose weekend woes stemmed from $3.3 billion in then-inaccessible bank reserves at Silicon Valley Bank) has been a win for Liquity, a decentralized platform for taking out loans denominated in protocol’s primary token, LUSD.

Liquity’s LUSD "clearly managed to take center stage during the USDC depeg panic, and that’s likely caused some investors to take a second look at" LQTY, said Andrew Thurman, head of research for data company Nansen.

While LUSD is meant to retain its dollar peg, Liquidity’s secondary token LUSD has seen the upside. LQTY, which has a total supply of 100 million and a market capitalization of $314 million, per CoinGecko, captures the fee revenue generated by the Liquity protocol, which are then paid out to stakers.

Data from Nansen shows a 10% jump in wallets holding the LUSD stablecoin since March 6, indicative of a new stablecoin narrative following the depegging of USDC.

Liquity allows users to deposit ether (ETH) into the protocol as collateral and take out loans denominated in U.S. dollar-pegged stablecoin LUSD. Instead of charging a variable interest rate for drawing loans, Liquity has a 0% interest rate, charging users a one-time fee.

With a total value locked (TVL) of $683 million, according to data aggregator DeFiLlama, Liquity has generated $30 million in lifetime revenue. As of March 11, users have borrowed almost $4.5 billion LUSD, according to a dune dashboard created by a Liquity developer.

Number of LQTY tokens staked is growing (Etherscan)
Number of LQTY tokens staked is growing (Etherscan)

Currently, more than 52 million LQTY worth about $184 million has been staked, which represents 52% of the total supply of LQTY, per blockchain explorer Etherscan.

Binance, which opened up trading for spot trading pairs LQTY/BTC and LQTY/USDT on Feb. 28, currently owns roughly 11.57% of the total LQTY supply, data from blockchain analytics firm Nansen shows.


Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.

Sage D. Young

Sage D. Young was a tech protocol reporter at CoinDesk. He owns a few NFTs, gold and silver, as well as BTC, ETH, LINK, AAVE, ARB, PEOPLE, DOGE, OS, and HTR.

Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to to register and buy your pass now.