Liquity

Website	https://www.liquity.org
X (Twitter)	https://x.com/LiquityProtocol
GitHub	https://github.com/liquity
Defillama	liquity
Chain	Ethereum

Declaration

This review has been submitted by CookingCryptos, sagaciousyves on 2024-10-23.

It was reviewed and published by the DeFi Collective team on 2024-10-23.

The review has not been updated since the initial submission.

This content is provided "as is" and "as available". Read more in our Terms.

Stage

Risks

ChainUpgradeabilityAutonomyExitWindowAccessibility

Summary

Liquity is a decentralized borrowing protocol that allows you to draw interest-free loans against Ether used as collateral. Loans are paid out in LUSD (a USD pegged stablecoin) and need to maintain a minimum collateral ratio of 110%.

In addition to the collateral, the loans are secured by a Stability Pool containing LUSD and by fellow borrowers collectively acting as guarantors of last resort. Learn more about these mechanisms under Liquidation.

Overview

Chain

The Liquity protocol is deployed on Ethereum mainnet.

Chain score: L

Upgradeability

All permissions in the system have been renounced and the protocol is fully immutable. No upgrades or changes can be made to the protocol, its functions or parameters.

Upgradeability score: L

Autonomy

Liquity relies on two external oracles, Chainlink (primary) and Tellor (fallback), but has a robust fallback mechanism in place, using the "last good price" if both oracles fail or become untrusted. This ensures the protocol can continue operating without interruption, minimizing the impact of oracle failure on its performance. Despite its reliance on external oracles, Liquity’s fallback systems mitigates the risk of disruptions.

Autonomy score: L

Exit Window

Liquity’s contracts are fully immutable, no upgrades or changes can be made, removing the need for an exit window.

Exit Window score: L

Accessibility

Multiple user interfaces exist and are operated by independent actors ensuring access to the protocol and user funds even if an interface is shutdown or censors a user's transactions.

A list of third-party frontends can be found here.

Accessibility score: L

Technical Analysis

Contracts

ContractName	Address
activePool	0xDf9Eb223bAFBE5c5271415C75aeCD68C21fE3D7F
borrowerOperations	0x24179CD81c9e782A4096035f7eC97fB8B783e007
troveManager	0xA39739EF8b0231DbFA0DcdA07d7e29faAbCf4bb2
collSurplusPool	0x3D32e8b97Ed5881324241Cf03b2DA5E2EBcE5521
communityIssuance	0xD8c9D9071123a059C6E0A945cF0e0c82b508d816
defaultPool	0x896a3F03176f05CFbb4f006BfCd8723F2B0D741C
hintHelpers	0xE84251b93D9524E0d2e621Ba7dc7cb3579F997C0
lockupContractFactory	0x2eBeF24dA09489218Ba2BECb01867F6DaAeDcD4B
lqtyStaking	0x4f9Fbb3f1E99B56e0Fe2892e623Ed36A76Fc605d
priceFeed	0x4c517D4e2C851CA76d7eC94B805269Df0f2201De
sortedTroves	0x8FdD3fbFEb32b28fb73555518f8b361bCeA741A6
stabilityPool	0x66017D22b0f8556afDd19FC67041899Eb65a21bb
gasPool	0x9555b042F969E561855e5F28cB1230819149A8d9
unipool	0xd37a77E71ddF3373a79BE2eBB76B6c4808bDF0d5
lusdToken	0x5f98805A4E8be255a32880FDeC7F6728C6568bA0
lqtyToken	0x6DEA81C8171D0bA574754EF6F8b412F2Ed88c54D
multiTroveGetter	0xFc92d0E9Fa35df17E3A6d9F40716ca2cE749922B
uniToken	0xF20EF17b889b437C151eB5bA15A47bFc62bfF469
Chanlink LUSD feed	0x3D7aE7E594f2f2091Ad8798313450130d0Aba3a0
Tellor USD feed	0xAd430500ECDa11E38C9bCB08a702274b94641112

Permission Owners

All external permissions are revoked, the protocol is immutable 🎉

Permissions

Contract	Function	Impact	Owner
ActivePool	setAddresses	The permissioned function allows the owner of the permission to set the following addresses in order to set relationships to co-dependent smart contracts of the Liquity system: troveManager, borrowerOperations, stabilityPoolAddress and defaultPoolAddress.	0x0
BorrowerOperations	setAddresses	The permissioned function allows the owner of the permission to set the following addresses in order to set relationships to co-dependent smart contracts of the Liquity system: activePool, collSurplusPool, lusdToken, troveManager, lqtyStaking, gasPoolAddress, lqtyStakingAddress, defaultPool, priceFeed, sortedTroves and stabilityPoolAddress.	0x0
TroveManager	setAddresses	The permissioned function allows the owner of the permission to set the following addresses in order to set relationships to co-dependent smart contracts of the Liquity system: defaultPool, priceFeed, collSurplusPool, lqtyStaking, borrowerOperationsAddress, activePool, gasPoolAddress, lqtyToken, lusdToken, sortedTroves and stabilityPool.	0x0
CollSurplusPool	setAddresses	The permissioned function allows the owner of the permission to set the following addresses in order to set relationships to co-dependent smart contracts of the Liquity system: activePoolAddress, borrowerOperationsAddress, troveManagerAddress.	0x0
CommunityIssuance	setAddresses	The permissioned function allows the owner of the permission to set the following addresses in order to set relationships to co-dependent smart contracts of the Liquity system: lqtyToken, stabilityPoolAddress.	0x0
DefaultPool	setAddresses	The permissioned function allows the owner of the permission to set the following addresses in order to set relationships to co-dependent smart contracts of the Liquity system: troveManagerAddress, activePoolAddress.	0x0
HintHelpers	setAddresses	The permissioned function allows the owner of the permission to set the following addresses in order to set relationships to co-dependent smart contracts of the Liquity system: troveManager, sortedTroves.	0x0
LockupContractFactory	setLQTYTokenAddress	The permissioned function allows the owner of the permission to set the following addresses in order to set relationships to co-dependent smart contracts of the Liquity system: lqtyTokenAddress.	0x0
LQTYStaking	setAddresses	The permissioned function allows the owner of the permission to set the following addresses in order to set relationships to co-dependent smart contracts of the Liquity system: lqtyToken, troveManagerAddress, borrowerOperationsAddress, activePoolAddress, lusdToken.	0x0
PriceFeed	setAddresses	The permissioned function allows the owner of the permission to set the following addresses in order to set relationships to co-dependent smart contracts of the Liquity system: priceAggregator, tellorCaller.	0x0
SortedTroves	setParams	The permissioned function allows the owner of the permission to set the following addresses in order to set relationships to co-dependent smart contracts of the Liquity system: troveManager, borrowerOperationsAddress. And it allows to set the max size for data.	0x0
StabilityPool	setAddresses	The permissioned function allows the owner of the permission to set the following addresses in order to set relationships to co-dependent smart contracts of the Liquity system: troveManager, borrowerOperations, activePool, lusdToken, sortedTroves, priceFeed and communityIssuance.	0x0
Unipool	setAddresses	The permissioned function allows the owner of the permission to set the following addresses in order to set relationships to co-dependent smart contracts of the Liquity system: lqtyToken and uniToken.	0x0

Dependencies

The only external protocol dependency is an ETH/USD price feed (the Oracle) which is used to compute the value of users’ collateral when minting LUSD, redeeming LUSD or liquidating troves.

The system relies on two different oracles: Chainlink is the primary oracle and Tellor is the fallback oracle in case the chainlink price feed is frozen or untrusted. The Chainlink price feed is deployed at 0x3D7aE7E594f2f2091Ad8798313450130d0Aba3a0, the Tellor oracle is deployed at 0xAd430500ECDa11E38C9bCB08a702274b94641112.

If both Chainlink and Tellor are frozen or untrusted the last good price is used and the system keeps operating allowing users to withdraw their assets.

Exit Window

The protocol is completely immutable, thus no exit window is required 🎉

Security Council

The protocol is completely immutable, thus no Security Council is required 🎉

See all Protocols