Liquity USD (LUSD) price

Liquity USD (LUSD) is a dollar-pegged stablecoin, a token on the Ethereum network. It is issued by the Liquity protocol: users lock ETH as collateral and borrow LUSD against it. It serves as a decentralized alternative to stablecoins backed by a company holding reserves in bank accounts.

The protocol is deliberately simple and has little reliance on governance. Loans carry no ongoing interest, only a one-time fee. The minimum collateral ratio is 110% of the debt, and a position that falls below it is liquidated. Two mechanisms keep the price near a dollar: any holder can redeem LUSD for ETH at face value, and the Stability Pool absorbs the debt of liquidated positions. The LUSD token itself works as the unit of account and as the asset deposited into that pool. The first version of the protocol has no governance token, and its smart contracts are designed to be immutable, with no admin keys.

Supply: about 26.8 million LUSD is in circulation, which equals the total supply. There is no cap. LUSD is minted when users borrow and burned when they repay, so supply follows demand for loans against ETH rather than a fixed issuance schedule.

What to watch. Collateral is mostly ETH, so a sharp drop in its price or congestion on Ethereum puts pressure on the system. The peg relies on protocol mechanisms rather than an issuer's reserves, and during stress the price can drift away from $1. Smart contract bugs are a risk as well. The stablecoin market is competitive: LUSD holds a small share against much larger tokens and newer designs, including Liquity's own later products. This is reference information, not investment advice.