Unlike other DeFi protocols, Liquity does not rely on human governance to vote on monetary interventions. All protocol parameters are either preset and immutable or algorithmically controlled by the protocol itself — making human interventions redundant.

By measuring the redemption volumes and applying a time decay mechanism, it constantly adjusts the base rate, serving as a basis for both the borrowing and redemption fees.

Combining this governance-free nature with the one-time borrowing fee creates a predictable experience for users borrowing against their ETH.