Leviathan News

DeFi Mogul Colin Platt from Liquity comes on the episode to discuss the announcement of Liquity v2. We talked about the challenges faced by the Liquidity V1 protocol due to changing interest rates and the need for a new design.

Liquity V2 introduces an interest rate model that allows users to set their own rates and borrow at a fee they find reasonable. The redemption mechanism is redesigned to create an internal market, where borrowers paying the least for their debt are redeemed first. The revenue generated from interest rates is split between the redemption pool and protocol incentivized liquidity pools. The protocol aims to target users who value decentralization and need stablecoins backed without links to the fiat world.

Liquity V2 announcement: https://www.liquity.org/blog/introducing-the-next-evolution-of-cdps

Chapters

00:00 Introduction and Background
01:02 Challenges of Immutable DeFi Protocols
02:24 Impact of Changing Interest Rates on Liquidity V1
03:20 Decline of Liquidity V1 and Need for Liquidity V2
04:18 Overview of Liquidity V2
05:12 Issues with the Peg Defense Mechanism
06:09 Importance of Immutability and Decentralization
07:38 Flexibility and Adaptability of DeFi Protocols
08:07 The Price of Money and Interest Rates
09:33 Total Collateralization and Cost of Capital
10:30 Importance of Access to Interest Rates
11:29 Positive Reception of Liquidity V1 and Need for Improvement
11:58 Redemption Mechanism in Liquidity V2
13:27 Decentralized Interest Rate Models
14:22 Incentivized Liquidity Pools and Market Dynamics
16:19 Redemption Mechanism and Borrowing Costs
17:18 Valuing LUSD in Bond Terms
19:14 Managing Interest Rates and Borrowing Costs
20:32 Allocation of Interest Rate Revenue
21:31 Evolution of Liquidity V2 Design
23:27 Challenges of Leverage Token Model
25:20 Importance of Decentralization in Stablecoins
27:47 Interest Rate Market Dynamics and Future Potential
28:44 Protocol Incentivized Liquidity and Liquidity Pools
30:35 Target Audience and Use Cases
32:54 New Protocol and Existing Liquidity Token
35:08 Market Positioning and Product Market Fit
36:26 Liquidation Thresholds and Multi-Collateral Approach
37:20 Decentralization and Collateral Types
38:47 L2 Support and Partnerships
43:40 Future Market Cap and Product Differentiation
49:13 Front-end Runners and Value Addition
50:39 Expanding Front-end Delivery Options
51:09 DeFi Collective and Liquidity Building
51:40 Skipping LRTs for Risk Mitigation
53:07 Uncertainty in the LRT Market
54:35 Innovation and Launch Plans

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