Bi-Weekly Wrap Up #23

Welcome to the Bi-Weekly Wrap Up, a bi-weekly series where we go over all of the highlights within the Liquity ecosystem. This issue covers 1/17/22 – 1/30/22.

What is Liquity? Liquity is a decentralized borrowing protocol that allows you to draw 0% interest loans against Ether used as collateral. Learn more.

System Overview

It’s no secret that the market has been volatile over the last month, and the Total Collateral Ratio (TCR) chart illustrates this. During the last two weeks, the TCR had hit 176.3% — the all-time-low since the May 19th flash-crash.
Although the TCR has recently bounced back up to ~210%, Recovery Mode, which triggers at 150% TCR, is still a valid concern for borrowers considering how rocky ETH price has been. Due to this, we recommend taking a refresher on Recovery Mode and Trove Management.

Speaking of the potential risks involved, 104 liquidations occurred over the last two weeks. This is ~3x more than what we covered in the last Bi-Weekly Wrap Up.
This statistic is again comparable to MakerDAO with 100 ETH-Vault liquidations during the same time period. It’s starting to seem that there may be a pattern between Liquity Troves and MakerDAO ETH Vault liquidations.
As users may know, LUSD has been trading a slight premium due to the increased buy pressure. This presents an interesting arbitrage opportunity for Stability Pool depositors who may be interested in selling LUSD for other stablecoins via Curve.

Integrations

A vote for Idle Finance to integrate lusdCRV will go live today. If voted in, LUSD liquidity providers on Curve will be able to earn yield from Convex Finance in different tranches according to their risk appetite. More details here.
A Stability Pool vault on Yearn Finance is live. The vault auto-compounds LQTY rewards and ETH gains back into the LUSD deposit. Use it here.

Content

Chainlink wrote a case study covering how Liquity utilizes their ETH/USD price feed. Read it here.
Robert, the CEO and Founder of Liquity, wrote a Twitter thread about LUSD’s recent peg deviation. Read it here.

Liquity Resources:

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