Convert
Bangladeshi Taka (BDT) to Liquity (LQTY) Instantly
Purchase Liquity (LQTY) with Bangladeshi Taka (BDT) easily at Switchere and benefit from fast, secure transactions.
About
Liquity (LQTY)
Liquity is a decentralized borrowing protocol built on the Ethereum blockchain that offers a unique approach to DeFi lending. Its core function is to allow users to draw interest-free loans against their Ether (ETH) collateral. These loans are paid out in LUSD, a fully redeemable, USD-pegged stablecoin. A primary innovation of this digital asset protocol is its exceptional capital efficiency, requiring a minimum collateral ratio of only 110%. This design makes it one of the most accessible on-chain borrowing solutions available within the decentralized finance ecosystem, directly addressing the issue of over-collateralization common in other platforms.
The system’s architecture is rooted in true decentralization. Liquity’s smart contracts are immutable and the protocol operates without any form of governance, minimizing human intervention and creating a more predictable financial instrument. Its robust liquidation mechanism is managed algorithmically and supported by a Stability Pool, where LUSD holders can deposit their tokens to participate in liquidating under-collateralized positions, known as Troves. The native utility token, LQTY, is not a governance token. Instead, its primary function is for staking. By staking LQTY, holders earn a share of the protocol fees generated from LUSD issuance and redemptions, providing a direct revenue stream from the protocol's core operations.
How to Buy Liquity (LQTY)
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Frequently asked questions
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What is the most common method to buy Liquity (LQTY) with Bangladeshi Taka (BDT)?
Direct BDT/LQTY trading pairs are rare. The standard method is a two-step process using a fiat on-ramp. First, you buy a major cryptocurrency like USDT or ETH with BDT on a Peer-to-Peer (P2P) marketplace that supports local payment methods like bKash or bank transfers. After receiving the digital asset, you transfer it to a decentralized exchange (DEX) or a centralized exchange that lists LQTY and swap it for Liquity tokens. -
What is the primary function of the LQTY token within the Liquity DeFi protocol?
The LQTY token's main utility is staking. By staking LQTY, holders can earn a share of the protocol's revenue, which is generated from issuance fees when users open collateralized debt positions (Troves) to borrow the LUSD stablecoin, and from redemption fees. Unlike many DeFi governance tokens, LQTY does not grant voting rights, as the Liquity protocol is immutable and designed to run without human intervention. -
Are Liquity loans truly interest-free, and what fees are involved?
Yes, the Liquity protocol offers interest-free loans. Instead of recurring interest, it charges a one-time issuance fee when you borrow LUSD by opening a Trove. There is also a redemption fee when users redeem LUSD for the underlying ETH collateral. These fees are algorithmically adjusted based on redemption volumes. This model simplifies cost calculation for borrowers compared to variable interest rate protocols. -
What are the main risks to consider when interacting with the Liquity protocol via a BDT on-ramp?
There are several layers of risk. First is counterparty risk on the P2P platform when converting BDT. Always use reputable platforms with escrow services. Second, smart contract risk, inherent in any DeFi protocol, although Liquity is audited and immutable. Third, collateral volatility risk; if the value of your collateral (e.g., ETH) drops significantly, your Trove can be liquidated. Finally, Ethereum network gas fees can be high, impacting the profitability of smaller transactions. -
How does the Stability Pool in Liquity work and how does it relate to LQTY?
The Stability Pool is the first line of defense in maintaining system solvency. Users deposit LUSD into it to help repay the debt of liquidated Troves. In return, these depositors receive the liquidated collateral (e.g., ETH) at a discount. Over time, Stability Pool depositors also earn LQTY token rewards as an incentive for providing this crucial liquidity buffer for the protocol. It's a key mechanism for both system stability and LQTY distribution.