# Table of Contents - [Liqwid Documents Hub | Liqwid Docs](#liqwid-documents-hub-liqwid-docs) - [Supply & Earn | Liqwid Docs](#supply-earn-liqwid-docs) - [Borrow | Liqwid Docs](#borrow-liqwid-docs) - [LQ Token Details | Liqwid Docs](#lq-token-details-liqwid-docs) - [Liquidations | Liqwid Docs](#liquidations-liqwid-docs) - [What is Liqwid v2? | Liqwid Docs](#what-is-liqwid-v2-liqwid-docs) - [Risk Analysis | Liqwid Docs](#risk-analysis-liqwid-docs) - [Governance | Liqwid Docs](#governance-liqwid-docs) - [Security | Liqwid Docs](#security-liqwid-docs) - [qTokens | Liqwid Docs](#qtokens-liqwid-docs) - [Brand Kit | Liqwid Docs](#brand-kit-liqwid-docs) - [Liqwid v2 App User Guide | Liqwid Docs](#liqwid-v2-app-user-guide-liqwid-docs) - [Interest Rates | Liqwid Docs](#interest-rates-liqwid-docs) - [Liqwid Community Incentivized Marketing Program (LCIMP) | Liqwid Docs](#liqwid-community-incentivized-marketing-program-lcimp-liqwid-docs) - [Protocol Revenue: Net Margin and LQ Buybacks | Liqwid Docs](#protocol-revenue-net-margin-and-lq-buybacks-liqwid-docs) - [API Documentation | Liqwid Docs](#api-documentation-liqwid-docs) --- # Liqwid Documents Hub | Liqwid Docs ![](https://liqwid-labs.gitbook.io/liqwid-docs/~gitbook/image?url=https%3A%2F%2F1956931724-files.gitbook.io%2F%7E%2Ffiles%2Fv0%2Fb%2Fgitbook-x-prod.appspot.com%2Fo%2Fspaces%252F-MYzCd96BjSLRMU9mVR_%252Fuploads%252FgatPcSmqKTuuPTFXKM6q%252FLiqwid%2520Logo%2520Horizontal%2520Main.png%3Falt%3Dmedia%26token%3Dbc8fbcd2-4d87-4cf4-8179-ad94cd307a47&width=768&dpr=4&quality=100&sign=f747eba&sv=2) Liqwid v2 is live on mainnet! Cardano's largest lending protocol now 10x faster: [**https://v2.liqwid.finance/**](https://v2.liqwid.finance/) Liqwid is a decentralized liquidity protocol for lending and borrowing ADA, Cardano native tokens (CNTs), and stablecoins. The Liqwid protocol is composed of audited smart contracts built with Plutus, the smart contract programming language of the Cardano blockchain. The smart contracts enable users to deposit assets in a liquidity market, earn interest on these deposits and instantly create new loans with no fixed repayment schedule in a non-custodial and secure approach. ADA suppliers (qADA holders) earn full staking rewards on the ADA deposits in Liqwid's Cardano liquidity market through delegation to Liqwid run stake pools (LQWD). This documents repository contains important resources on Liqwid to fully understand the protocol's core components. Be sure to join the community on [Liqwid Discord Server](https://discord.gg/PZ3GUWamY8) and participate in governance and protocol discussions alongside members of our core team and Liqwid community members. Community managers and core team members look forward to answering any of your questions to help you more easily integrate with or build on top of the Liqwid API. If you have any additional questions please join the [Liqwid Discord server](https://discord.gg/PZ3GUWamY8) where Community Managers and Core Team members are available to answer all of your inquiries. **\*Please note there is NO Liqwid telegram or airdrop**. Please immediately report any Liqwid telegram channel you come across and be sure to stay safe by always verifying in our [Liqwid Discord server](https://discord.gg/PZ3GUWamY8) . [](https://liqwid-labs.gitbook.io/liqwid-docs/what-is-liqwid-v2) ![Cover](https://liqwid-labs.gitbook.io/liqwid-docs/~gitbook/image?url=https%3A%2F%2F1956931724-files.gitbook.io%2F%7E%2Ffiles%2Fv0%2Fb%2Fgitbook-x-prod.appspot.com%2Fo%2Fspaces%252F-MYzCd96BjSLRMU9mVR_%252Fuploads%252F6PVg3ZNtsHqMFTpGmxZ4%252FRSAsset%252011.png%3Falt%3Dmedia%26token%3D5ebfac54-3bec-4d2e-a4ff-b7b3f668127b&width=490&dpr=4&quality=100&sign=951df9d6&sv=2) What is Liqwid v2? [](https://liqwid-labs.gitbook.io/liqwid-docs/supply-and-earn) ![Cover](https://liqwid-labs.gitbook.io/liqwid-docs/~gitbook/image?url=https%3A%2F%2F1956931724-files.gitbook.io%2F%7E%2Ffiles%2Fv0%2Fb%2Fgitbook-x-prod.appspot.com%2Fo%2Fspaces%252F-MYzCd96BjSLRMU9mVR_%252Fuploads%252FzJsNGWo7Gx1hfX17Znwp%252FRSAsset%25203.png%3Falt%3Dmedia%26token%3Df80004d1-e04d-4ca8-b5a1-a53af570e7c2&width=490&dpr=4&quality=100&sign=b5941460&sv=2) Supply & Earn [](https://liqwid-labs.gitbook.io/liqwid-docs/borrow) ![Cover](https://liqwid-labs.gitbook.io/liqwid-docs/~gitbook/image?url=https%3A%2F%2F1956931724-files.gitbook.io%2F%7E%2Ffiles%2Fv0%2Fb%2Fgitbook-x-prod.appspot.com%2Fo%2Fspaces%252F-MYzCd96BjSLRMU9mVR_%252Fuploads%252FPd7I0LzmlKeT3kKIiwta%252FRSAsset%25201.png%3Falt%3Dmedia%26token%3De9ad31af-b5f6-4016-a1a2-c07bd4c12ba4&width=490&dpr=4&quality=100&sign=e57e6f9a&sv=2) Borrow [](https://liqwid-labs.gitbook.io/liqwid-docs/lq-token-details) ![Cover](https://liqwid-labs.gitbook.io/liqwid-docs/~gitbook/image?url=https%3A%2F%2F1956931724-files.gitbook.io%2F%7E%2Ffiles%2Fv0%2Fb%2Fgitbook-x-prod.appspot.com%2Fo%2Fspaces%252F-MYzCd96BjSLRMU9mVR_%252Fuploads%252Fbv7nLcE6tx8XlL3iMIC7%252FRSAsset%25205.png%3Falt%3Dmedia%26token%3De56f71ba-4c8a-4450-b94c-cc8e3a4e70a4&width=490&dpr=4&quality=100&sign=73cd0a4f&sv=2) LQ Token Details [](https://liqwid-labs.gitbook.io/liqwid-docs/liqwid-v2-app-user-guide) ![Cover](https://liqwid-labs.gitbook.io/liqwid-docs/~gitbook/image?url=https%3A%2F%2F1956931724-files.gitbook.io%2F%7E%2Ffiles%2Fv0%2Fb%2Fgitbook-x-prod.appspot.com%2Fo%2Fspaces%252F-MYzCd96BjSLRMU9mVR_%252Fuploads%252FTnc4mWQ5MI5YT7303AFI%252FRSAsset%25204.png%3Falt%3Dmedia%26token%3D07037ba2-916e-429d-be5f-0b83891754e9&width=490&dpr=4&quality=100&sign=25852aba&sv=2) Liqwid v2 App User Guide [](https://liqwid-labs.gitbook.io/liqwid-docs/liquidations) ![Cover](https://liqwid-labs.gitbook.io/liqwid-docs/~gitbook/image?url=https%3A%2F%2F1956931724-files.gitbook.io%2F%7E%2Ffiles%2Fv0%2Fb%2Fgitbook-x-prod.appspot.com%2Fo%2Fspaces%252F-MYzCd96BjSLRMU9mVR_%252Fuploads%252FldPKFGSh4regHYVSajiM%252FRSAsset%25202.png%3Falt%3Dmedia%26token%3D4da7f982-643a-4951-b04a-df4b8441dc0f&width=490&dpr=4&quality=100&sign=17e25c60&sv=2) Liquidations [](https://liqwid-labs.gitbook.io/liqwid-docs/risk-analysis) ![Cover](https://liqwid-labs.gitbook.io/liqwid-docs/~gitbook/image?url=https%3A%2F%2F1956931724-files.gitbook.io%2F%7E%2Ffiles%2Fv0%2Fb%2Fgitbook-x-prod.appspot.com%2Fo%2Fspaces%252F-MYzCd96BjSLRMU9mVR_%252Fuploads%252FnIHmck40FnXraOskVGQV%252FRSNew-icon%2520%282%29.png%3Falt%3Dmedia%26token%3D456ed8ba-bc61-432b-af40-63cb955a6c1c&width=490&dpr=4&quality=100&sign=1fa60b18&sv=2) Risk Analysis [](https://liqwid-labs.gitbook.io/liqwid-docs/governance) ![Cover](https://liqwid-labs.gitbook.io/liqwid-docs/~gitbook/image?url=https%3A%2F%2F1956931724-files.gitbook.io%2F%7E%2Ffiles%2Fv0%2Fb%2Fgitbook-x-prod.appspot.com%2Fo%2Fspaces%252F-MYzCd96BjSLRMU9mVR_%252Fuploads%252FK1AOQobCXohL46Ud00TH%252FRSAsset%25206.png%3Falt%3Dmedia%26token%3Db01f03c5-6a33-4b4c-8d4a-8b2a91687773&width=490&dpr=4&quality=100&sign=521e52da&sv=2) Governance [](https://liqwid-labs.gitbook.io/liqwid-docs/security) ![Cover](https://liqwid-labs.gitbook.io/liqwid-docs/~gitbook/image?url=https%3A%2F%2F1956931724-files.gitbook.io%2F%7E%2Ffiles%2Fv0%2Fb%2Fgitbook-x-prod.appspot.com%2Fo%2Fspaces%252F-MYzCd96BjSLRMU9mVR_%252Fuploads%252FXwIR6TLDQPedWByvmhxc%252FRSAsset%25207.png%3Falt%3Dmedia%26token%3D2f8cc32d-fc16-4681-ab64-b162e91660c1&width=490&dpr=4&quality=100&sign=edb51c5b&sv=2) Security [](https://liqwid-labs.gitbook.io/liqwid-docs/faq) ![Cover](https://liqwid-labs.gitbook.io/liqwid-docs/~gitbook/image?url=https%3A%2F%2F1956931724-files.gitbook.io%2F%7E%2Ffiles%2Fv0%2Fb%2Fgitbook-x-prod.appspot.com%2Fo%2Fspaces%252F-MYzCd96BjSLRMU9mVR_%252Fuploads%252FlXNQnmlAUdrO7RE2FVjx%252FRSAsset%25208.png%3Falt%3Dmedia%26token%3D0783d263-2b66-4ba0-9b28-2232626ae00f&width=490&dpr=4&quality=100&sign=21f8d652&sv=2) qTokens [](https://liqwid-labs.gitbook.io/liqwid-docs/interest-rates) ![Cover](https://liqwid-labs.gitbook.io/liqwid-docs/~gitbook/image?url=https%3A%2F%2F1956931724-files.gitbook.io%2F%7E%2Ffiles%2Fv0%2Fb%2Fgitbook-x-prod.appspot.com%2Fo%2Fspaces%252F-MYzCd96BjSLRMU9mVR_%252Fuploads%252FCa5xvUB5tKmRn43Hk7cA%252FRSAsset%25209.png%3Falt%3Dmedia%26token%3Dc6317dbd-bbb9-45b4-a698-421516ca947a&width=490&dpr=4&quality=100&sign=73a00b40&sv=2) Interest Rates ![Cover](https://liqwid-labs.gitbook.io/liqwid-docs/~gitbook/image?url=https%3A%2F%2F1956931724-files.gitbook.io%2F%7E%2Ffiles%2Fv0%2Fb%2Fgitbook-x-prod.appspot.com%2Fo%2Fspaces%252F-MYzCd96BjSLRMU9mVR_%252Fuploads%252F0O8rqKyjEx1HgqjQjQ4u%252FRSAsset%252010.png%3Falt%3Dmedia%26token%3Dd2ff210b-18c8-4d38-a4cc-b237888f3933&width=490&dpr=4&quality=100&sign=e7a40d5a&sv=2) Brand Kit [](https://liqwid-labs.gitbook.io/liqwid-docs/protocol-revenue-net-margin-and-lq-buybacks) ![Cover](https://liqwid-labs.gitbook.io/liqwid-docs/~gitbook/image?url=https%3A%2F%2F1956931724-files.gitbook.io%2F%7E%2Ffiles%2Fv0%2Fb%2Fgitbook-x-prod.appspot.com%2Fo%2Fspaces%252F-MYzCd96BjSLRMU9mVR_%252Fuploads%252FlOJ18968WhINlJQV71y6%252FRSNew-icon%2520%281%29.png%3Falt%3Dmedia%26token%3D14f6749b-edf9-4c15-adee-12de6f4103f8&width=490&dpr=4&quality=100&sign=3340d9f5&sv=2) Protocol Revenue: Net Margin and LQ Buybacks [NextWhat is Liqwid v2?](https://liqwid-labs.gitbook.io/liqwid-docs/what-is-liqwid-v2) Last updated 6 months ago Was this helpful? --- # Supply & Earn | Liqwid Docs ### [](https://liqwid-labs.gitbook.io/liqwid-docs/supply-and-earn#how-do-i-supply) How do I supply? Navigate to the "Supply" section and click on "Supply" for the asset you want to deposit. Enter the amount you would like to supply and click on "Supply" to submit your transaction. You begin earning interest as soon as your supply transaction successfully lands on-chain. _Note: When you supply ADA to Liqwid, you earn both:_ • **Interest** from borrowers using your ADA • **Cardano staking rewards** — passed through directly to you. You can claim them in our reward page: [https://liqwid-rewards.sundaeswap.finance/](https://liqwid-rewards.sundaeswap.finance/) _It’s a dual interest+yield model unique to Liqwid’s ADA market._ ### [](https://liqwid-labs.gitbook.io/liqwid-docs/supply-and-earn#what-are-qtokens) What are qTokens? The assets users supply into Liqwid markets are represented as qTokens. Supplier's qTokens function as a “receipt” token indicating that the owner of the qTokens can withdraw a value-equivalent amount of underlying assets from the market, plus any interest accrued since the initial deposit. Liqwid qTokens are similar to the LP tokens users receive when providing liquidity on decentralized exchanges (DEX). ### [](https://liqwid-labs.gitbook.io/liqwid-docs/supply-and-earn#how-much-will-i-earn) How much will I earn? * Your earnings depend on supply-demand conditions in each market — and the type of asset you supply. ADA, for example, earns both staking rewards and borrower interest, while stablecoins earn interest only. * Higher utilization rates typically result in higher interest rates earned by suppliers. * Each supported asset on Liqwid has its own market with a unique Annual Percentage Yield (APY) that updates regularly according to liquidity supplied and borrowed. [](https://liqwid-labs.gitbook.io/liqwid-docs/supply-and-earn#is-there-a-minimum-or-maximum-amount-to-supply) Is there a minimum or maximum amount to supply? ------------------------------------------------------------------------------------------------------------------------------------------------------------------ There is a minimum amount set for each market and displayed in the supply modal for each asset. Supply caps were introduced as a risk control feature in Liqwid v2. As a result if a market has a supply cap level applied you may supply any amount up that cap which is displayed for each market on the market's details page. ![](https://liqwid-labs.gitbook.io/liqwid-docs/~gitbook/image?url=https%3A%2F%2F1956931724-files.gitbook.io%2F%7E%2Ffiles%2Fv0%2Fb%2Fgitbook-x-prod.appspot.com%2Fo%2Fspaces%252F-MYzCd96BjSLRMU9mVR_%252Fuploads%252FiMIQ7rjQ2kFsJDead3jS%252FScreen%2520Shot%25202024-08-06%2520at%25202.11.57%2520PM.png%3Falt%3Dmedia%26token%3D9f287577-58f7-4cd4-9fce-8c7899780851&width=768&dpr=4&quality=100&sign=2e08aaf6&sv=2) This is an illustrative example. [](https://liqwid-labs.gitbook.io/liqwid-docs/supply-and-earn#can-i-borrow-at-a-fixed-rate) Can I borrow at a fixed rate? ------------------------------------------------------------------------------------------------------------------------------ No, the Liqwid protocol only supports borrowing with variable interest rates based on supply and demand in each market. [](https://liqwid-labs.gitbook.io/liqwid-docs/supply-and-earn#do-borrowers-earn-anything-on-their-collateral) Do borrowers earn anything on their collateral? ------------------------------------------------------------------------------------------------------------------------------------------------------------------ Yes — especially in the ADA market. When borrowers **supply ADA as collateral**, they continue earning **staking rewards** on that ADA throughout the life of the loan. Liqwid’s smart contracts uniquely enable this **dual utility** — your ADA stays liquid, withdrawable once the loan is repaid, and continues staking while securing your borrow position [PreviousWhat is Liqwid v2?](https://liqwid-labs.gitbook.io/liqwid-docs/what-is-liqwid-v2) [NextBorrow](https://liqwid-labs.gitbook.io/liqwid-docs/borrow) Last updated 2 months ago Was this helpful? --- # Borrow | Liqwid Docs ### [](https://liqwid-labs.gitbook.io/liqwid-docs/borrow#what-is-the-advantage-of-borrowing-instead-of-selling-my-assets) What is the advantage of borrowing instead of selling my assets? When you sell your assets you exit the position on that specific asset and locking in your current profit or loss on the position. If you have long term crypto holdings or are long on the asset, you would not realize any potential future value appreciation. When you instead borrow you are able to access liquidity without selling your crypto assets. Most users complete borrows to access working capital and tap into the liquidity of their long term holdings. ### [](https://liqwid-labs.gitbook.io/liqwid-docs/borrow#how-do-i-borrow) How do I borrow? Before borrowing you must supply an asset into a Liqwid market to be used as collateral (please review Supply & Earn FAQ section for more details). Once you complete a supply action, navigate to the "Your Borrows" section of the Dashboard and click on “Borrow” for the asset you would like to borrow. Enter the amount you want to borrow depending on your supplied amounts that would be used as a collateral for the loan. Click on "Borrow" and submit your transaction. You may modify the loan to add or remove collateral at any time after the loan has been created. ### [](https://liqwid-labs.gitbook.io/liqwid-docs/borrow#how-much-can-i-borrow) How much can I borrow? The maximum amount you can borrow depends on the total value of your supplied asset(s), and the Borrow market’s current liquidity. You can't borrow an asset if the current liquidity is less than the amount you want to borrow from the market. Similarly if your loan's health factor is too low you won't be able to complete the borrow transaction. You can review each asset supported as collateral on Liqwid and its specific risk parameters for borrowing in the market's details page. Liqwid v2 introduced the borrow cap risk control feature which limits the total amount of liquidity that may be borrowed from a market to protect lenders during periods of heightened borrow demand. Borrow caps for each asset are displayed in the market's details page. ### [](https://liqwid-labs.gitbook.io/liqwid-docs/borrow#what-asset-do-i-need-to-repay) What asset do I need to repay? You must repay your full loan in the same asset you borrowed. For example, if you borrow 100 ADA you will pay back 100 ADA plus interest accrued from the moment you open the loan to the moment you repay the loan. ### [](https://liqwid-labs.gitbook.io/liqwid-docs/borrow#can-i-borrow-at-a-stable-interest-rate) Can I borrow at a stable interest rate? No, the Liqwid protocol only supports variable rate borrowing. The borrowing rate is calculated individually for each asset based on the assets current supply and borrow demand (Market Utilization). Markets with low borrow demand have lower borrow rates, markets with strong borrow demand have higher borrow rates. ### [](https://liqwid-labs.gitbook.io/liqwid-docs/borrow#how-much-would-i-pay-in-interest) How much would I pay in interest? The interest rate you pay on your loan(s) is based on the borrowing rate. The variable borrow rates update continuously as supply and borrow actions are processed in a market, impacting the total you would pay in interest. In the Dashboard section of the app the current borrowing rate for each market will be displayed in the "Your Borrows" section. ### [](https://liqwid-labs.gitbook.io/liqwid-docs/borrow#what-is-the-health-factor) What is the health factor? The health factor is a number which calculates the safety of your collateral assets compared to your borrowed assets based on USD value. A larger health factor represents a safer loan, your collateral assets are more secure from a liquidation event the higher your health factor is. If your loan's health factor goes to 1 or below, the liquidation of your collateral assets will be enabled. For a health factor of 2, the collateral USD value can reduce by 50% against the borrow USD value. Your loan's health factor is based on the liquidation threshold of your collateral assets and the collateral USD value versus the USD value of your borrowed assets. You can find all of the collateral parameters in the market's details page. ### [](https://liqwid-labs.gitbook.io/liqwid-docs/borrow#what-happens-if-my-health-factor-is-reduced) What happens if my health factor is reduced? Based on the change in USD value for your supplied assets against the change in USD value for your borrowed assets, your loan's health factor will move up or down. If your loan's health factor increases, it will improve your collateral asset's safety by moving the liquidation threshold further out from being triggered. If the USD value of your collateral assets decrease versus the USD value of your borrowed, your loan's health factor is also decreased, this would reduce your collateral asset's safety by increasing the risk of reaching the liquidation threshold. ### [](https://liqwid-labs.gitbook.io/liqwid-docs/borrow#what-is-the-collateral-factor) What is the collateral factor? A market's collateral factor can range from 0-90%, and determines the liquidity that a user receives against their qToken collateral. Typically, high market cap or assets with more liquidity have higher collateral factors and low market cap or less liquid assets have lower collateral factors. This is implemented to protect liquidity protocols from backing a large percent of liabilities with illiquid assets marked by increased volatility and slippage. If a market has a 0% collateral factor, the asset can't be used as collateral though it can still be borrowed. Collateral factors updated can be proposed and implemented via onchain governance votes in the Liqwid DAO. Liqwid DAO community members propose updates to market collateral factors to manage the protocol's risk and effectively adapt to changing market conditions. ### [](https://liqwid-labs.gitbook.io/liqwid-docs/borrow#when-do-i-need-to-repay-my-borrowed-assets) When do I need to repay my borrowed assets? Loans are perpetual in Liqwid meaning there is no fixed time period where you must repay the loan. If your position is secure (health factor > 1), you can borrow for as long of a time period as you want. The accrued interest on your loan will increase over time causing your remaining borrowable amount to decrease. This could result in increasing the possibility of reaching the liquidation threshold. ### [](https://liqwid-labs.gitbook.io/liqwid-docs/borrow#how-do-i-repay-my-loan) How do I repay my loan? To repay your loan browse to your open positions in the "Your borrows" section of the dashboard and click the "Repay" button for the asset you borrowed and want to repay. Enter the amount to repay and confirm the transaction in your connected wallet. ### [](https://liqwid-labs.gitbook.io/liqwid-docs/borrow#how-do-i-avoid-liquidation) How do I avoid liquidation? Maintaining a strong health factor (above 2) helps avoid risk of reaching the liquidation threshold that would trigger a collateral liquidation. You can do this by repaying your loan or depositing more collateral assets in your debt position to increase your health factor. Of these two available options to more safely manage your borrow position, repaying the loan would increase your health factor more (since each USD repaid increases your health factor 1:1 but each USD supplied increases your health factor 1 USD x the collateral factor of the asset). [PreviousSupply & Earn](https://liqwid-labs.gitbook.io/liqwid-docs/supply-and-earn) [NextLQ Token Details](https://liqwid-labs.gitbook.io/liqwid-docs/lq-token-details) Last updated 8 months ago Was this helpful? --- # LQ Token Details | Liqwid Docs [](https://liqwid-labs.gitbook.io/liqwid-docs/lq-token-details#description) Description -------------------------------------------------------------------------------------------- LQ is the Liqwid DAO Token used to govern various protocol and ecosystem parameters. Once staked in Liqwid's governance module, it can be used to vote, earn staking rewards, and receive a percentage of the protocol's revenues. 1 LQ Token = 1 Vote in the Liqwid DAO [](https://liqwid-labs.gitbook.io/liqwid-docs/lq-token-details#total-supply) Total Supply ---------------------------------------------------------------------------------------------- The total LQ Token supply is **21,000,000** [](https://liqwid-labs.gitbook.io/liqwid-docs/lq-token-details#usdlq-token-policy-id-and-asset-name) $LQ Token Policy ID & Asset Name ------------------------------------------------------------------------------------------------------------------------------------------ Policy ID: da8c30857834c6ae7203935b89278c532b3995245295456f993e1d24 Asset Name: 4c51 (asset13epqecv5e2zqgzaxju0x4wqku0tka60wwpc52z) Transaction ID: [https://cardanoscan.io/transaction/344c26673b9256b10e215d86095d9eb3c63def4b5a31cf50f12d4a133024eabc](https://cardanoscan.io/transaction/344c26673b9256b10e215d86095d9eb3c63def4b5a31cf50f12d4a133024eabc) [https://cardanoscan.io/token/8e420ce194ca84040ba6971e6ab816e3d76ee9ee](https://cardanoscan.io/token/8e420ce194ca84040ba6971e6ab816e3d76ee9ee) \*LQ was minted in Cardano's first multi-asset block ([Mary hard fork](https://iohk.zendesk.com/hc/en-us/articles/900004369646-Release-announcement-Mary-hard-fork-compatible-components-available-for-download) ) using a timelock script meaning no additional LQ can ever be minted. The total and max supply for LQ is 21M. [](https://liqwid-labs.gitbook.io/liqwid-docs/lq-token-details#lq-token-allocation) LQ Token Allocation ------------------------------------------------------------------------------------------------------------ Since April 2023, the Liqwid DAO has served as the governing body for LQ tokens, overseeing both their current and future allocations. ![](https://liqwid-labs.gitbook.io/liqwid-docs/~gitbook/image?url=https%3A%2F%2F1956931724-files.gitbook.io%2F%7E%2Ffiles%2Fv0%2Fb%2Fgitbook-x-prod.appspot.com%2Fo%2Fspaces%252F-MYzCd96BjSLRMU9mVR_%252Fuploads%252FWqwAYoUmzpFPu1E6bf5O%252Fimage%2520%2835%29.png%3Falt%3Dmedia%26token%3Da65cc3f7-6683-46a1-871d-9d64da442447&width=768&dpr=4&quality=100&sign=26b426d1&sv=2) [](https://liqwid-labs.gitbook.io/liqwid-docs/lq-token-details#lq-token-vesting) LQ Token Vesting ------------------------------------------------------------------------------------------------------ There are two allocations which receive LQ distributions according to a linear vesting schedule: 1. Liqwid core team, advisors and founders allocation (18.9%) 2. Liqwid Labs seed round investors, a subset of the Core Team, Founders, Advisors allocation (6.1%) 1. Liqwid core team, advisors and founders allocation of LQ tokens is distributed based on a 24 month linear vesting schedule that started February 2023 at the time of the Liqwid v1 mainnet launch and ended February 2025. Equal LQ amounts were vested monthly for the full 24 month vesting period. 2. Liqwid seed round investors allocation of LQ tokens is distributed based on the same 24 month linear vesting schedule as the core team but with the addition of a 4 month cliff that started February 2023 at the time of Liqwid v1 mainnet launch. Following the end of the 4 month cliff Liqwid seed round investors received their first distribution in June 2023 and will receive their final vest according to the 24 month linear vesting schedule in June 2025. [PreviousBorrow](https://liqwid-labs.gitbook.io/liqwid-docs/borrow) [NextLiqwid v2 App User Guide](https://liqwid-labs.gitbook.io/liqwid-docs/liqwid-v2-app-user-guide) Last updated 7 months ago Was this helpful? --- # Liquidations | Liqwid Docs [](https://liqwid-labs.gitbook.io/liqwid-docs/liquidations#initiate-a-loan) Initiate a loan ------------------------------------------------------------------------------------------------ The borrower needs to first supply a supported asset as collateral in a Liqwid market to be able to open a loan. Each supplied asset will unlock some value the user may borrow against depending on the assets assigned collateral factor. Once the asset type and amount are selected, the borrowed assets are transferred from the market directly to the borrower’s connected wallet. The maximum amount to borrow is determined by the collateral factor set by the margin system for the asset type the user supplied as collateral. Example: In the situation where 1 ADA has an exchange rate of 2 USD, the borrower is depositing 1,000 ADA as collateral. The market value of his pledge is USD 2,000 and the collateral factor for ADA is 70% x USD 2,000 = USD 1,400. This is the maximum amount to be borrowed before the user reaches negative account liquidity and risks liquidation. ![](https://liqwid-labs.gitbook.io/liqwid-docs/~gitbook/image?url=https%3A%2F%2F1956931724-files.gitbook.io%2F%7E%2Ffiles%2Fv0%2Fb%2Fgitbook-legacy-files%2Fo%2Fassets%252F-MYzCd96BjSLRMU9mVR_%252F-Mkw4JoFKjh9PKHgXk3I%252F-MkwBZz0q3-hTF18COgB%252Fimage.png%3Falt%3Dmedia%26token%3D37508c71-7579-44c2-8eeb-61127ba6aad7&width=768&dpr=4&quality=100&sign=21ec7206&sv=2) [](https://liqwid-labs.gitbook.io/liqwid-docs/liquidations#loan-origination-fee) Loan origination fee ---------------------------------------------------------------------------------------------------------- There is a 1% loan origination fee to open a loan in the Liqwid protocol. These fees are currently divided 50-50 between distributions to LQ stakers and the DAO treasury. [](https://liqwid-labs.gitbook.io/liqwid-docs/liquidations#repay-a-loan) Repay a loan ------------------------------------------------------------------------------------------ You must repay your full loan in the asset you borrowed. For example, if you borrow 100 ADA you will pay back 100 ADA principal + interest accrued when you repay the loan. Borrowers can repay or add collateral at any time — even when their **Health Factor (HF)** is below 1 — as long as their transaction reaches the chain before a liquidator acts. [](https://liqwid-labs.gitbook.io/liqwid-docs/liquidations#liquidation-events) Liquidation events ------------------------------------------------------------------------------------------------------ During the lifecycle of a loan, the liquidity cushion could reach zero or the account liquidity approaches negative. This occurs when the value of the collateral is falling relative to the value of the borrowed asset plus accrued interest. To actively remove the credit risk of the protocol, materialized by the exposure to defaulting loans, a liquidation incentive exists. The mechanism is that any user (liquidator) can bring the borrowed asset and repay the default loan using either a liquidation bot or directly within the Liqwid app UI. During the liquidation transaction the liquidators assets will be exchanged against the seized collateral of a defaulting loan to repay the original asset that was borrowed. The liquidator will also receive the collateral at a discount determined by the liquidation bonus parameter. Liquidation bonuses for each asset are displayed in the market's details page. Each market has a liquidation bonus parameter applied. This means successful liquidators receive a default borrower's collateral at a discount when they repay their underwater loan in part or full. E.g. the ADA market has a 10% liquidation bonus, when a liquidator repays a default ADA loan there is a 10% bonus applied on the total collateral they receive. \*Note: the liquidation bonus is a governance configurable parameter used to incentivize liquidators/bot operators to repay underwater loans. The parameter is subject to changes based on market conditions. Liquidators should pay attention to discussions on the [Liqwid governance forum](https://gov.liqwid.finance/) for liquidation bonus parameter updates and liquidation bonus parameters set for new markets. Example: In the situation where the ADA exchange rate drops from 1 ADA = 2 USD to 1 ADA = 1.5 USD. The market value of the collateral is USD 1,500 and the collateral value is USD 1,050. If the borrowed amount (nominal+interest) is greater than the adjusted collateral value (USD 1’050), the loan will be liquidated. ![](https://liqwid-labs.gitbook.io/liqwid-docs/~gitbook/image?url=https%3A%2F%2F1956931724-files.gitbook.io%2F%7E%2Ffiles%2Fv0%2Fb%2Fgitbook-legacy-files%2Fo%2Fassets%252F-MYzCd96BjSLRMU9mVR_%252F-Mkw4JoFKjh9PKHgXk3I%252F-MkwCMHqWEN0efuJ7XaR%252Fimage.png%3Falt%3Dmedia%26token%3Da8ad61b8-641d-4c70-bfe8-9e0d8147bb6c&width=768&dpr=4&quality=100&sign=f85f87c4&sv=2) [](https://liqwid-labs.gitbook.io/liqwid-docs/liquidations#liquidation-process) Liquidation process -------------------------------------------------------------------------------------------------------- Any user can initiate the liquidation of a loan having a Health Factor below 1. These loans are shown in the app UI page "Liquidation". Liquidators can also repay defaulting loans using the open source liquidation bots. Once a wallet is liquidated, the seized collateral is exchanged against the assets from the corresponding liquidators wallet. The discounted collateral price used for the liquidation allows the liquidator to directly seize collateral at a 10% discount (ADA market is currently set to 10%). The liquidation bonus is claimed entirely by the successful liquidator, the protocol does not take any fee or margin from liquidators during this process. The protocol itself never auto-liquidates or issues margin calls; liquidations occur only when a third party executes the transaction. As long as no liquidator has acted, the borrower still retains control: they can add collateral or repay to restore their Health Factor to above 1. **Important notes** * Because liquidators are financially incentivized, loans below HF = 1 are typically liquidated quickly. However, if no liquidators step in (e.g. during network congestion or a rapid market crash), the position remains open and undercollateralized until someone does. * In such cases, the collateral stays in the contract; it is not “frozen forever,” but its value may continue to fall, leading to **bad debt** if the debt eventually exceeds the collateral’s value. * Bad debt represents a loss to the market suppliers until the protocol rebalances through future liquidations and repayments. **No margin calls** Liqwid does not issue margin calls or automatically request additional collateral. It is the user’s responsibility to monitor their Health Factor and manage their loan. **Summary** * **HF > 1:** Loan is healthy. * **HF ≤ 1:** Loan can be liquidated at any time. * **Borrower may still repay or add collateral until a liquidator acts.** * **No automatic margin call — self-managed risk.** * **If debt > collateral and no liquidation occurs, the position becomes bad debt (loss shared by suppliers).** [PreviousLiqwid v2 App User Guide](https://liqwid-labs.gitbook.io/liqwid-docs/liqwid-v2-app-user-guide) [NextRisk Analysis](https://liqwid-labs.gitbook.io/liqwid-docs/risk-analysis) Last updated 1 month ago Was this helpful? --- # What is Liqwid v2? | Liqwid Docs Since launching on mainnet in Q1 2023, Liqwid has rapidly become the largest and most-used lending protocol on Cardano. Its fully aggregated liquidity model is more capital-efficient and flexible compared to peer-to-peer or partially aggregated models. This allows borrowers to pay lower interest fees and repay their loans anytime, without fixed repayment dates. Lenders also earn interest on their collateral. Liqwid v2 introduced advanced on-chain risk control features like borrow caps and supply caps, which limit how much can be borrowed or deposited in each market. These measures help manage protocol risk effectively. The protocol can also isolate assets, allowing it to define specific debt trading pairs for a given collateral. This means every asset can have customized risk parameters, tailored based on its quality. Beyond risk management, Liqwid v2 included a full upgrade of the app’s off-chain architecture and APIs. Newly used tools and techniques now allow users to perform lending and borrowing actions in seconds. These tools also improve how the app reads Cardano blockchain data and builds transactions, leading to a much smoother user experience. Liqwid’s backend infrastructure includes custom-built systems designed for performance, monitoring, and redundancy. These systems support the app, batching and oracle functionalities and also includes back-end alert and control mechanisms. [PreviousLiqwid Documents Hub](https://liqwid-labs.gitbook.io/liqwid-docs) [NextSupply & Earn](https://liqwid-labs.gitbook.io/liqwid-docs/supply-and-earn) Last updated 6 months ago Was this helpful? --- # Risk Analysis | Liqwid Docs ### [](https://liqwid-labs.gitbook.io/liqwid-docs/risk-analysis#collateralized-debt-position-lending) Collateralized Debt Position Lending The most popular decentralized lending protocols employ a borrowing design called _Collateralized Debt Positions (CDP)._ This design allows borrowers to deposit cryptocurrencies as collateral to obtain loans, effectively making them liquidity providers for financial actors. Borrowers often earn interest on the collateral they supply, but also pay a variable or fixed interest to the suppliers of the asset that they borrow. CDPs are perpetually open until the borrower decides to repay or the value of the asset plus outstanding interest passes a set threshold compared to the value of the collateral provided. In this situation, the position is open to be liquidated. By repaying the loan, a liquidator can claim the collateral used by the borrower at a discount rate. Lenders can deposit their assets to access the yield paid by borrowers. The yield they receive on their lent assets is determined by a formula that increases borrow interest rates based on the current borrow demand for the asset. [](https://liqwid-labs.gitbook.io/liqwid-docs/risk-analysis#economic-risks) Economic Risks ----------------------------------------------------------------------------------------------- ### [](https://liqwid-labs.gitbook.io/liqwid-docs/risk-analysis#liquidations) Liquidations Each borrowed position is backed by collateral that is valued higher than the borrowed asset. If the collateral value of a CDP drops to near the value of the borrowed asset it becomes open for liquidation. To liquidate a position, any user can repay the outstanding borrowed assets and claim the collateral that had backed the position. To incentivize users to liquidate these positions, they receive the collateral at a discount of its open market value. If a user is liquidated, they are the party who absorbs the loss of the discount paid to the liquidator. **Liqwid risk mitigation measures:** * Selected maximum Loan-to-Value threshold depending on the collateral’s quality * Selected liquidation bonus depending on the collateral's quality * Selected supply and borrow caps to limit the amount of an asset that can be supplied or borrowed ### [](https://liqwid-labs.gitbook.io/liqwid-docs/risk-analysis#cascading-liquidations) Cascading Liquidations A subset of liquidations, cascading liquidations occur when initial liquidations impact the price of the collateral at the ecosystem level, causing additional positions to become open to being liquidated. This happens, when the liquidator trades the collected collateral to another asset, causing the price of the collateral to drop further and subsequently exposing additional CDPs to be liquidated. **Liqwid risk mitigation measures:** * Adapt the thresholds for the maximum supply cap and borrow cap based on the token liquidity (analysis of the on-chain and off-chain liquidity) ### [](https://liqwid-labs.gitbook.io/liqwid-docs/risk-analysis#bad-debt) Bad Debt An economic risk that can have significant impact on the protocol and users is if the protocol accrues bad debt. This occurs when a CDP open for liquidation is not liquidated, resulting in the collateral being worth less than the debt it is backing. Bad debt can occur when the collateral does not have a large enough supply in the open market to allow a liquidator to convert it into another asset without incurring fees that make the liquidation unprofitable. Bad debt in a protocol implies that either the protocol will need to cover the losses of the debt to make the suppliers whole or the debt is left in the protocol meaning that some suppliers will not be able to withdraw the entirety of their assets. #### [](https://liqwid-labs.gitbook.io/liqwid-docs/risk-analysis#liqwid-risk-mitigation-measures) Liqwid risk mitigation measures: * Adapt the thresholds for the maximum supply cap and borrow cap based on the token liquidity (analysis of the on-chain and off-chain liquidity) * Selected Loan-to-Value threshold depending on the collateral’s quality * Selected liquidation discount depending on the collateral's quality [](https://liqwid-labs.gitbook.io/liqwid-docs/risk-analysis#description-of-the-market-risks) Description of the market risks --------------------------------------------------------------------------------------------------------------------------------- ### [](https://liqwid-labs.gitbook.io/liqwid-docs/risk-analysis#liquidity-risk) Liquidity risk A surge in withdrawal can increase the interest rates, pushing further liquidation, or preventing a user to withdraw. **Liqwid risk mitigation measures:** * Monitoring dashboards to track inflows and outflows in realtime _(coming soon)._ * Update the interest rates in response to current market conditions * Update the thresholds for the maximum supply cap and borrow cap in response to current market conditions ### [](https://liqwid-labs.gitbook.io/liqwid-docs/risk-analysis#market-volatility) Market Volatility Unpredictable swings in the crypto market present a considerable hazard. Significant drops in the value of collateral can make health factor inferior to 1 and can prompt liquidation cascades. **Liqwid risk mitigation measures:** * Adapt the cap and floor levels for the maximum and minimum price with Liqwid app. * Use of Liqwid internal price aggregator as benchmark _(NEW to be implemented)._ * Use of risk alerts for users to manage their loan’s collateral _(NEW to be implemented)._ ### [](https://liqwid-labs.gitbook.io/liqwid-docs/risk-analysis#oracle-manipulation) Oracle Manipulation Attackers might target the oracles by manipulating the price of some tokens. A classic scenario entails attackers leveraging “low liquidity” tokens, inflating their prices artificially, and then maximizing borrowings against this distorted value, burdening the protocol with unpalatable debt. **Liqwid risk mitigation measures:** * Adapt the cap and floor levels for the maximum and minimum price with Liqwid app. * Use of Liqwid internal price aggregator as benchmark _(NEW to be implemented)._ ### [](https://liqwid-labs.gitbook.io/liqwid-docs/risk-analysis#concentration-risks) Concentration Risks High asset concentration leads to centralization and potential manipulation risks. By examining the whale concentration, one can gauge asset distribution. A high concentration can imply centralization threats. **Liqwid risk mitigation measures:** * Onboard only tokens as collateral which have a critical mass of holders and mindshare * Onboard tokens with larger market caps, liquidity and CEX listings ### [](https://liqwid-labs.gitbook.io/liqwid-docs/risk-analysis#token-implosion-risks) Token implosion Risks Some tokens can have their price going to zero, when they are subject to hack, fraud or during a depeg events for stablecoins. In such cases, the Core Team can react given its power granted through the governance to: * Update the cap and floor levels for the maximum and minimum price with Liqwid app * Activate the pause guardian which temporarily halts ability to complete actions in an affected market [PreviousLiquidations](https://liqwid-labs.gitbook.io/liqwid-docs/liquidations) [NextGovernance](https://liqwid-labs.gitbook.io/liqwid-docs/governance) Last updated 1 year ago Was this helpful? --- # Governance | Liqwid Docs [](https://liqwid-labs.gitbook.io/liqwid-docs/governance#what-is-the-liqwid-dao) What is the Liqwid DAO? ------------------------------------------------------------------------------------------------------------- Liqwid DAO is a community of members that propose improvements to the Liqwid protocol and function as a Decentralized Autonomous Organization via onchain delegation, staking and proposal voting. It functions like a general assembly, where all shareholders of a corporation can submit proposals and vote on parameter changes. LQ tokens that have been staked (deposited in the Liqwid governance smart contract) unlock 1:1 voting power in the DAO. Each user has the choice to vote themselves or delegate their voting power to a Cardano wallet of their choosing. \*Only LQ tokens staked in the Liqwid DAO's governance smart contract instance can use their voting power to delegate or cast a vote. Proposal topics can range from new market launches or any other protocol parameter update. The Liqwid DAO also votes to determine the use of the treasury to finance improvement of the protocol or community ecosystem. [](https://liqwid-labs.gitbook.io/liqwid-docs/governance#agora-the-governance-smart-contract-module) Agora - The governance smart contract module ------------------------------------------------------------------------------------------------------------------------------------------------------ Governance actions and updates in the Liqwid protocol are proposed and voted on by LQ governance token holders. [Agora governance module](https://github.com/Liqwid-Labs/agora) (including delegation and voting) and the [LQ](https://cardanoscan.io/token/da8c30857834c6ae7203935b89278c532b3995245295456f993e1d244c51) DAO Token are the fundamental components of Liqwid DAO governance through which protocol changes are initiated. Collectively these onchain mechanisms enable the Liqwid ecosystem to delegate voting power, propose protocol changes, vote and execute updates via the Governor contract. Liqwid Improvement Proposals (LIPs) can modify the protocol's economic or governance parameters, whitelist new markets, or introduce completely new features to the protocol. [](https://liqwid-labs.gitbook.io/liqwid-docs/governance#submit-a-proposal) Submit a proposal -------------------------------------------------------------------------------------------------- Proposals are submitted and discussed in the [Liqwid DAO governance forum](https://gov.liqwid.finance/) . After sufficient discussion, polling and community feedback period a proposal is advanced to onchain voting. * “Liqwid Improvement Proposals” (LIPs) are a path to change the functioning code or parameters as decided on by the majority vote of LQ delegates and stakers. * A dedicated [governance forum](https://gov.liqwid.finance/) has been setup for the LQ community to voice governance ideas and collectively decide the future of the Liqwid protocol and ecosystem. ### [](https://liqwid-labs.gitbook.io/liqwid-docs/governance#voting) Voting You can participate in any active vote by voting directly or delegating your voting rights to the Cardano address of your choice. If you receive voting power through delegation, you can vote with the full voting power of your wallet's aggregated LQ delegation. ![](https://liqwid-labs.gitbook.io/liqwid-docs/~gitbook/image?url=https%3A%2F%2F1956931724-files.gitbook.io%2F%7E%2Ffiles%2Fv0%2Fb%2Fgitbook-x-prod.appspot.com%2Fo%2Fspaces%252F-MYzCd96BjSLRMU9mVR_%252Fuploads%252FcitKeX9NpxABOZwZUOQO%252FScreenshot%25202025-05-06%2520141603.png%3Falt%3Dmedia%26token%3D2035c2b1-d87e-4b6f-9ab9-4bef1714e076&width=768&dpr=4&quality=100&sign=51c59e2f&sv=2) [](https://liqwid-labs.gitbook.io/liqwid-docs/governance#executing-a-successful-proposal-vote-action) Executing a successful proposal vote action ------------------------------------------------------------------------------------------------------------------------------------------------------ Proposals are considered successful and may be executed if 50.0001% of the votes submitted are in favor of the proposal. [PreviousRisk Analysis](https://liqwid-labs.gitbook.io/liqwid-docs/risk-analysis) [NextSecurity](https://liqwid-labs.gitbook.io/liqwid-docs/security) Last updated 7 months ago Was this helpful? --- # Security | Liqwid Docs The Liqwid protocol is built in Cardano’s Plutus smart contract language with a focus on security, performance and software correctness. [](https://liqwid-labs.gitbook.io/liqwid-docs/security#exernal-security-audit) Exernal Security Audit ---------------------------------------------------------------------------------------------------------- The Liqwid protocol's Plutus onchain code (smart contracts) has been audited by Vacuumlabs. The full audit report has been made publicly accessible following completion and can be viewed on Google drive [here](https://drive.google.com/file/d/1G876DEDefbP0rf19otkGuOdY_Cwh79fT/view?usp=sharing) . [PreviousGovernance](https://liqwid-labs.gitbook.io/liqwid-docs/governance) [NextqTokens](https://liqwid-labs.gitbook.io/liqwid-docs/faq) Last updated 1 year ago Was this helpful? --- # qTokens | Liqwid Docs [](https://liqwid-labs.gitbook.io/liqwid-docs/faq#how-do-liqwid-qtokens-work) How do Liqwid qTokens work? -------------------------------------------------------------------------------------------------------------- qTokens are Cardano native tokens which function as interest bearing assets and receipt tokens similar to LP tokens on a DEX. As borrower interest accrues in a market, the exchange rate of qToken to the underlying aggregated assets increases. The redemption of an underlying asset can be performed at any point in time by burning qTokens assuming sufficient liquidity exists. The difference in value between the qToken and the underlying token is the time value of money, which corresponds to accrued interests to be received on the supplied assets by qToken holders. The value of the asset XYZ deposited by the suppliers will increase over time due to the accrued interests. ![](https://liqwid-labs.gitbook.io/liqwid-docs/~gitbook/image?url=https%3A%2F%2F1956931724-files.gitbook.io%2F%7E%2Ffiles%2Fv0%2Fb%2Fgitbook-legacy-files%2Fo%2Fassets%252F-MYzCd96BjSLRMU9mVR_%252F-Mkw4JoFKjh9PKHgXk3I%252F-Mkw7j9bIrovevSajNY9%252Fimage.png%3Falt%3Dmedia%26token%3Dcf62f3fd-eb36-4167-966e-017333941e20&width=768&dpr=4&quality=100&sign=cd2006aa&sv=2) \*The exchange rate between the underlying asset to corresponding qToken is increasing over time to capture the continuously accruing borrow interest. \*Please note market and aggregated liquidity market are used interchangeably and both refer to the same Liqwid market smart contract that users supply assets to and borrow from. \*If sufficient liquidity does not exist for qToken suppliers to fully exit the market (due to high market utilization), users may partially withdraw assets from the protocol up to the amount of remaining assets. The protocol has liquidity buffers (market reserves) to ensure sufficient liquidity always exists for suppliers to exit a market. ![](https://liqwid-labs.gitbook.io/liqwid-docs/~gitbook/image?url=https%3A%2F%2F1956931724-files.gitbook.io%2F%7E%2Ffiles%2Fv0%2Fb%2Fgitbook-legacy-files%2Fo%2Fassets%252F-MYzCd96BjSLRMU9mVR_%252F-Mkw4JoFKjh9PKHgXk3I%252F-Mkw8O8hCjynuoXsnpYm%252Fimage.png%3Falt%3Dmedia%26token%3D4c4f0847-77ca-4bca-89a1-fad3d40d56fe&width=768&dpr=4&quality=100&sign=d62d1dde&sv=2) ![](https://liqwid-labs.gitbook.io/liqwid-docs/~gitbook/image?url=https%3A%2F%2F1956931724-files.gitbook.io%2F%7E%2Ffiles%2Fv0%2Fb%2Fgitbook-legacy-files%2Fo%2Fassets%252F-MYzCd96BjSLRMU9mVR_%252F-Mkw4JoFKjh9PKHgXk3I%252F-Mkw8iWb1ejZ_MJaQ15S%252Fimage.png%3Falt%3Dmedia%26token%3D368174dd-41c3-45b7-80f4-3ee17304d5e1&width=768&dpr=4&quality=100&sign=ea724e73&sv=2) \*The above is an example to visualize the qToken to underlying asset exchange rate change. For protocol math purposes the actual exchange rate will begin at .02, not 1:1. ### [](https://liqwid-labs.gitbook.io/liqwid-docs/faq#example-of-qtokens-and-exchange-rate-calculations) Example of qTokens and exchange rate calculations The qTokens value represents the value of the _principal + the accrued interests_. At t=0, the exchange rate for the qToken has been set arbitrary to 0,02. _Example for a market with 1 borrower and 2 suppliers._ Bob supply 10 ADA and Alice 10 ADA. Once they supplied, they have 500 qADA each. (10/0.02) Then some ADA are borrowed by Alice and interests are accrued over time, which resulted in interests of 2 ADA. (nothing changed on the supplied side). From this interest value of 2 ADA, 1.6 ADA are booked and belong to the suppliers (because 80% of the interests are allocated to the suppliers given the market parameters, activated through a governance vote). As Bob supplied 50% of the ADA pool (10 on 20), he should receive 0.8 ADA (1.6\*50%), and has supplied position equals to 10.8 ADA (10+0.8). Therefore, the exchange rate qToken/token is **0.0216.** _Exchange rate: (20 ADA + 1.6 Interests / 1’000 qtokens) = 0.0216_ _Calculation control for Bob: 500 qtoken x 0.0216 = 10.8 ADA_ [PreviousSecurity](https://liqwid-labs.gitbook.io/liqwid-docs/security) [NextInterest Rates](https://liqwid-labs.gitbook.io/liqwid-docs/interest-rates) Last updated 6 months ago Was this helpful? --- # Brand Kit | Liqwid Docs 301KB [Liqwid Logo Horizontal Main Light text.png](https://1956931724-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2F-MYzCd96BjSLRMU9mVR_%2Fuploads%2Fvmo4wYwqrkt9eVItwIBx%2FLiqwid%20Logo%20Horizontal%20Main%20Light%20text.png?alt=media&token=e1d7908e-002e-4c80-84e8-81e46e56013d) image Download[Open](https://1956931724-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2F-MYzCd96BjSLRMU9mVR_%2Fuploads%2Fvmo4wYwqrkt9eVItwIBx%2FLiqwid%20Logo%20Horizontal%20Main%20Light%20text.png?alt=media&token=e1d7908e-002e-4c80-84e8-81e46e56013d) 318KB [Liqwid Logo Horizontal Main.png](https://1956931724-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2F-MYzCd96BjSLRMU9mVR_%2Fuploads%2FEgXxw0NOZ2PO7JxPNRkO%2FLiqwid%20Logo%20Horizontal%20Main.png?alt=media&token=dbd5daf8-3f18-40b5-8fa2-6549ce52e914) image Download[Open](https://1956931724-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2F-MYzCd96BjSLRMU9mVR_%2Fuploads%2FEgXxw0NOZ2PO7JxPNRkO%2FLiqwid%20Logo%20Horizontal%20Main.png?alt=media&token=dbd5daf8-3f18-40b5-8fa2-6549ce52e914) 279KB [Liqwid Logo Vertical Main Light Text.png](https://1956931724-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2F-MYzCd96BjSLRMU9mVR_%2Fuploads%2Fq18nnta0ffocItJSyzix%2FLiqwid%20Logo%20Vertical%20Main%20Light%20Text.png?alt=media&token=4b8f1c52-96d8-4ac1-92dc-d124d2a6355c) image Download[Open](https://1956931724-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2F-MYzCd96BjSLRMU9mVR_%2Fuploads%2Fq18nnta0ffocItJSyzix%2FLiqwid%20Logo%20Vertical%20Main%20Light%20Text.png?alt=media&token=4b8f1c52-96d8-4ac1-92dc-d124d2a6355c) 289KB [Liqwid Logo Vertical Main.png](https://1956931724-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2F-MYzCd96BjSLRMU9mVR_%2Fuploads%2Fd7qT780d7zGTMB1xls4a%2FLiqwid%20Logo%20Vertical%20Main.png?alt=media&token=e572ef26-a474-4d7b-a808-0fe0f49a0a73) image Download[Open](https://1956931724-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2F-MYzCd96BjSLRMU9mVR_%2Fuploads%2Fd7qT780d7zGTMB1xls4a%2FLiqwid%20Logo%20Vertical%20Main.png?alt=media&token=e572ef26-a474-4d7b-a808-0fe0f49a0a73) 156KB [Liqwid Standalone Logomark copy.png](https://1956931724-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2F-MYzCd96BjSLRMU9mVR_%2Fuploads%2FGGBmC7VubyBJfpO62zZw%2FLiqwid%20Standalone%20Logomark%20copy.png?alt=media&token=d51b873c-4211-4db8-b77e-6efe39e0e06c) image Download[Open](https://1956931724-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2F-MYzCd96BjSLRMU9mVR_%2Fuploads%2FGGBmC7VubyBJfpO62zZw%2FLiqwid%20Standalone%20Logomark%20copy.png?alt=media&token=d51b873c-4211-4db8-b77e-6efe39e0e06c) 196KB [Liqwid Standalone Logoname White.png](https://1956931724-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2F-MYzCd96BjSLRMU9mVR_%2Fuploads%2FgbO4ecwymvtMTVgDi7Vu%2FLiqwid%20Standalone%20Logoname%20White.png?alt=media&token=76c1b1b7-4f8c-493b-bf01-6aad8a79ffae) image Download[Open](https://1956931724-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2F-MYzCd96BjSLRMU9mVR_%2Fuploads%2FgbO4ecwymvtMTVgDi7Vu%2FLiqwid%20Standalone%20Logoname%20White.png?alt=media&token=76c1b1b7-4f8c-493b-bf01-6aad8a79ffae) 212KB [Liqwid Standalone Logoname.png](https://1956931724-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2F-MYzCd96BjSLRMU9mVR_%2Fuploads%2FWnweibz5UobtkdErBKsT%2FLiqwid%20Standalone%20Logoname.png?alt=media&token=38792249-3480-4e67-89b4-a6fe40fa219d) image Download[Open](https://1956931724-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2F-MYzCd96BjSLRMU9mVR_%2Fuploads%2FWnweibz5UobtkdErBKsT%2FLiqwid%20Standalone%20Logoname.png?alt=media&token=38792249-3480-4e67-89b4-a6fe40fa219d) [PreviousInterest Rates](https://liqwid-labs.gitbook.io/liqwid-docs/interest-rates) [NextProtocol Revenue: Net Margin and LQ Buybacks](https://liqwid-labs.gitbook.io/liqwid-docs/protocol-revenue-net-margin-and-lq-buybacks) Last updated 12 months ago Was this helpful? --- # Liqwid v2 App User Guide | Liqwid Docs This user guide describes how to successfully complete market actions in the app and explains how to safely navigate the app as a borrower. For more information, questions or to request help navigating the app please join the Liqwid Discord server: [https://discord.gg/PZ3GUWamY8](https://discord.gg/PZ3GUWamY8) Liqwid Community Managers and core developers are here to help! [](https://liqwid-labs.gitbook.io/liqwid-docs/liqwid-v2-app-user-guide#supply-lend) **SUPPLY (LEND)** ---------------------------------------------------------------------------------------------------------- **How to supply assets (mint qTokens) and earn interest** Once you have your wallet connected to the Liqwid app interface with wallet collateral set, you’re ready to lend ADA, DJED and other Cardano native assets. Earning interest using Liqwid as a lender is as simple as supplying assets to a Liqwid Market and minting qTokens, an interest bearing token that represents your deposit amount and accrued interest. As borrowers repay accrued interest in that market the qToken to underlying asset exchange rate will increase, representing the repaid interest. This is the increased amount of underlying assets qToken holders earn. \*Cardano transaction costs must be paid using ADA and your wallet’s collateral must be set to interact with the app interface. You will need to ensure enough ADA remains in your wallet after a market action to pay for the transaction fees set by the Cardano network. To supply assets follow these steps! 1. Visit the app at [https://v2.liqwid.finance/](https://v2.liqwid.finance/) connect your wallet, and navigate to the “Assets to supply” section. 2. Select an asset to supply and click the "Supply" button. \*You may also track the current Supply APY (Annual Percentage Yield) representing the real yield suppliers in a market are currently earning (3.02% APY in the ADA market) on your Dashboard. The APY shown below the Supply APY is the LQ Rewards APY calculated based on borrowing demand in each market. ![](https://liqwid-labs.gitbook.io/liqwid-docs/~gitbook/image?url=https%3A%2F%2F1956931724-files.gitbook.io%2F%7E%2Ffiles%2Fv0%2Fb%2Fgitbook-x-prod.appspot.com%2Fo%2Fspaces%252F-MYzCd96BjSLRMU9mVR_%252Fuploads%252FEzuBD2vQt0l1IHmmt1JR%252FScreen%2520Shot%25202024-09-24%2520at%25202.42.20%2520PM.png%3Falt%3Dmedia%26token%3Dd9885428-565b-457b-904a-50a2ebd37a18&width=768&dpr=4&quality=100&sign=77b3e3bc&sv=2) 1. Enter the amount you want to supply in the "Amount" input field at the top of the modal. You can either enter a specific amount or click the ‘MAX’ button to supply your entire wallet’s balance. 2. Once you have entered the supply amount and reviewed the “Transaction overview” section click the “Supply” button at the bottom of the modal and approve the transaction in your wallet. \*You can review the current qADA exchange rate and supply APY to confirm how much qADA will be minted in your wallet and the current APY you will begin earning. Once you successfully complete the supply action a transaction overview will appear displaying your completed action. You can click the “Review transaction details” button to view the transaction hash on a Cardano block explorer. ![](https://liqwid-labs.gitbook.io/liqwid-docs/~gitbook/image?url=https%3A%2F%2F1956931724-files.gitbook.io%2F%7E%2Ffiles%2Fv0%2Fb%2Fgitbook-x-prod.appspot.com%2Fo%2Fspaces%252F-MYzCd96BjSLRMU9mVR_%252Fuploads%252FYWihnRQXmU6vNPHfS09t%252FScreen%2520Shot%25202024-09-24%2520at%25202.30.09%2520PM.png%3Falt%3Dmedia%26token%3Db4132b74-4689-4a2e-8599-1234eba19f8d&width=768&dpr=4&quality=100&sign=b4e3c30a&sv=2) You can view your supplied assets, the current APY, and the amount of supplied assets locked as collateral in the “Your supplies” section. [](https://liqwid-labs.gitbook.io/liqwid-docs/liqwid-v2-app-user-guide#borrow) BORROW ------------------------------------------------------------------------------------------ **How to borrow assets** The Liqwid protocol allows users to borrow assets once you have supplied one of the assets community governance has allowed to be used as collateral. The overcollateralized loans accrue a variable interest rate based on the market’s current borrow demand (that is the ratio of borrowed assets vs supplied, e.g. if 100 ADA is supplied to a market and 50 is borrowed the market has a 50% utilization ratio). Borrowers must keep their loan’s LTV beneath the maxLTV (maximum borrowing power) to avoid risking liquidations. The mainnet Liqwid ADA and DJED market’s both have a maxLTV of 75% (133% minimum collateral ratio). To borrow assets follow these steps! 1. Visit the app at [app.liqwid.finance](https://app.liqwid.finance/) , connect your wallet, and navigate to the “Assets to borrow” section. 2. Click on the “Borrow” button for the asset you want to borrow. 3. Input the amount you want to borrow in the “Amount” input field at the top of the modal. \*Entering a borrow amount in the “Amount” input field will prompt you to enter a collateral amount in the “Collateral distribution” input field, this is the amount of qToken collateral you want to lock as collateral to open the loan. Your loan must have enough collateral to reach a health factor of 1.067. \*The total amount you can borrow depends on the collateral value for the assets you have supplied and the available liquidity in the market you are borrowing from. 1. Enter a specific collateral amount in the “Collateral distribution” input field or click the “MAX” button to deposit your entire qToken balance as collateral. The loan must be under the ADA and DJED Market’s maxLTV of 75% to succeed (133% minimum collateral ratio). Review the loan details including the current interest rate to borrow the asset and your positions corresponding Health factor in the “Transaction overview” section. ![](https://liqwid-labs.gitbook.io/liqwid-docs/~gitbook/image?url=https%3A%2F%2Flh6.googleusercontent.com%2Ft3EoOCmkQRJjgK6Yo_g2dcr54l4381Tdj3pCxpgKNIPu5H-7eQZyiqmTJe5LeB50YZodC-XE_xmGW4lfUEeuu1eIiRpax72lShSXauWDuIRTGAw-ZNQ2wjTK_L82zusv4_tQozkKiRQVGUf8qWVYmE0&width=768&dpr=4&quality=100&sign=e2ccb379&sv=2) 1. After reviewing the borrow action details click the “Borrow” button at the bottom of the modal. Once the transaction completes you will receive the borrowed assets in your wallet. You can review the loan transaction hash and details on [cexplorer.io](https://cexplorer.io/) by clicking the “Review transaction details” button. \*Borrowers must monitor their loan’s health and be prepared to repay the position or increase collateral during adverse market conditions. ![](https://liqwid-labs.gitbook.io/liqwid-docs/~gitbook/image?url=https%3A%2F%2Flh5.googleusercontent.com%2F17yfGQTqtz27MKwznYZHF8a9tNMu0vKQWSpHD--DrdfLdvZR2xSX04ELaxbYGDhnUpkl9iqN56ON_y0eIgRoQPQfecNVn77-_iP9bygVDSIgScD5BPsIOWG3ip1w89IaLSft7pJao97abGpEvYAyfm4&width=768&dpr=4&quality=100&sign=2e44fe16&sv=2) Once you successfully complete a borrow action you will see your supplied balance reduced by the amount of collateral you entered in the “Collateral distribution” section and locked to open the loan. You can view this amount in the “Total locked collateral” column of the “Your supplies” section. You are earning interest on your entire supplied assets, including the qTokens you lock as collateral. \*You can unlock this collateral at anytime by completing a repay (or borrow) action and reducing the amount in the "Collateral distribution" input field. Detailed instructions for unlocking collateral are explained in the next section. ![](https://liqwid-labs.gitbook.io/liqwid-docs/~gitbook/image?url=https%3A%2F%2Flh3.googleusercontent.com%2FhV1VzLAcpEKqiWsqG6oaccFhm2WJGqlF5fyS7wc_YXQdpHrHEVinovyXMtn8SvMSIhD8PP4c3bfVp5hrIcp_442GvZIpLH8hLBphQiTvxQf32bGbZva6EZ7xMp6syNdzDBMPjBPeOHaouP6vogGA5m8&width=768&dpr=4&quality=100&sign=204b6f14&sv=2) [](https://liqwid-labs.gitbook.io/liqwid-docs/liqwid-v2-app-user-guide#unlock-collateral) UNLOCK COLLATERAL ---------------------------------------------------------------------------------------------------------------- **Reduce your collateral in the "Collateral distribution" input field of the repay modal** You can unlock your collateral by opening the repay (or borrow) modal, reducing the amount in the “Collateral distribution” section’s input field and completing an action. Please note you must complete a repay (or borrow) action on the loan to reduce and unlock your collateral. To unlock or modify collateral follow these steps! 1. Enter an amount to repay (or borrow) in the “Amount” input field at the top of the modal and enter the reduced qToken collateral amount in the “Collateral distribution” section’s input field. For your transaction to succeed please ensure your corresponding position is above the required 1.067 Health factor by reviewing the resulting Health factor in the “Transaction overview” section. ![](https://liqwid-labs.gitbook.io/liqwid-docs/~gitbook/image?url=https%3A%2F%2Flh5.googleusercontent.com%2F1m680b6FpiKH9ZVSDN-aRK1NzuI1j85T98zU96wmvIdYtx9mGsqb-C3Tvf-ozHsgTTX1dyrmiCOYmIZtgl7CJE1JVHDCiONQVYFUcM1Sefr-MMJjiSNpBSmM4avv7aQmj2bWztsjIFOpr8XEA6h1IRs&width=768&dpr=4&quality=100&sign=ebd2131a&sv=2) ![](https://liqwid-labs.gitbook.io/liqwid-docs/~gitbook/image?url=https%3A%2F%2Flh4.googleusercontent.com%2FE8EDYK0W8hp6YA9GF5v-JgMwxfIG8QNmFAcX39Qx4LhYVprQ9sUuprKQOWZxcjrtRa67jgP_lXsI9VYv42Yx5Efcwfoc1PKIjD-UmmvXgBZC1KaS8etoMPlqOfrUQVRfLQBgUwE2ZS35KNNvVamdmX8&width=768&dpr=4&quality=100&sign=65d3a01c&sv=2) [](https://liqwid-labs.gitbook.io/liqwid-docs/liqwid-v2-app-user-guide#repay) REPAY ---------------------------------------------------------------------------------------- **How to repay a loan** The Liqwid protocol enables you to fully or partially repay your loans on demand. You can also modify your loan’s collateral distribution during repayment if you wish to add or reduce collateral (see section above). To repay loans and modify collateral follow these steps! 1. Visit [app.liqwid.finance](https://app.liqwid.finance/) , connect your wallet, and click on the "Repay" button via the “Your borrows” table on the right. ![](https://liqwid-labs.gitbook.io/liqwid-docs/~gitbook/image?url=https%3A%2F%2Flh4.googleusercontent.com%2F5s_AgARvSxf4Rlm4GK-wjo2dzwTSLkx2X0rXsmnDrqEVXjQTO4LCVQWqYNbuJLhW2jCXk5qcH6MXZQVTTKSq6_zmJKlLQffjyxUCgUr_AT3n0ZbcwPvVt0I6amvBNYvA3Wi8ztzmsm0lUzs7Km1LaAk&width=768&dpr=4&quality=100&sign=bb3588c4&sv=2) 1. Enter the amount you wish to repay in the input field. You may also adjust your Collateral distribution input field to add or remove from your loan’s collateral as long as you maintain an LTV under the maxLTV for your collateral asset. \*To adjust your collateral amount enter an amount in the “Collateral distribution” section’s input field that corresponds to a valid LTV. When adjusting your collateral amount in the “Collateral distribution” input field the “Repay” button at the bottom of the modal will be grayed out until a valid amount is entered. ![](https://liqwid-labs.gitbook.io/liqwid-docs/~gitbook/image?url=https%3A%2F%2Flh3.googleusercontent.com%2Fzx7yUuAqThGL5ea6zQK05iu6KKOqOTZ67cY6ylOaF5k4d_OnSPidg6uQ45Xjtb69rCJfZWLYIYpRhVgjoRxX05gyz4kQtbf_tZgbk-c_WI-RlhZqpqPac9LgdwpK_06Yjoge_vpl8-lAi4BCjoimC_Q&width=768&dpr=4&quality=100&sign=b6068d00&sv=2) \*When you click the “MAX” button to repay your entire loan amount the “Collateral distribution” section will blur out indicating that your entire qToken collateral will be unlocked and returned to your wallet upon successful repayment of the total loan balance. ![](https://liqwid-labs.gitbook.io/liqwid-docs/~gitbook/image?url=https%3A%2F%2Flh4.googleusercontent.com%2FTauZWkH7fxpI9kfqVbU_6FhZNQoVeWKbHnpTA4cPrKPc7ScyQUvLgOJykExtR-0hlMMJBriYdQLB5tjyNrdN3wpft2eWJChlwjLaQ8B8qsRV_KQYSqq3EgqKHgowZOIW8YoIptduCn_xAoFCRwEiVlY&width=768&dpr=4&quality=100&sign=3ad9d391&sv=2) 1. Review the changes to your loan’s Health factor and remaining debt in the Transaction overview section. Be sure to maintain a strong Health factor above 1.067 to avoid collateral liquidation risk. 2. Once you have reviewed the borrow action details in the “Transaction overview” section, click “Repay” and approve the transaction in your wallet. ![](https://liqwid-labs.gitbook.io/liqwid-docs/~gitbook/image?url=https%3A%2F%2Flh6.googleusercontent.com%2F-0bBAjX3my8BmLgjyoiygTd7RQdzoyBlVc0krws8T8S_fIcAewPXq05oOlLGSXl4HvbuBbOH9VTIvn888rlWA_YXeYEcvagsEEK-TB-htr2M9rlEgquhvYkJaUlJBytY5QCOvJ9kF4aAH_t6hK0EaAY&width=768&dpr=4&quality=100&sign=c732790a&sv=2) To view the transaction hash and details on [cexplorer.io](https://cexplorer.io/) click the “Review transaction details” button. [](https://liqwid-labs.gitbook.io/liqwid-docs/liqwid-v2-app-user-guide#redeem-qtokens-withdraw) REDEEM qTokens (WITHDRAW) ------------------------------------------------------------------------------------------------------------------------------ Liqwid allows you to supply and withdraw your assets from the protocol at any time. When you supply ADA you mint qADA at the current exchange rate and when you redeem qADA you burn it and withdraw your supplied ADA back into your wallet. To redeem qTokens and withdraw assets from the protocol follow these steps! 1. Visit [app.liqwid.finance](https://app.liqwid.finance/) , connect your wallet, and click on the "Withdraw" button via the “Your supplies” table on the left. ![](https://liqwid-labs.gitbook.io/liqwid-docs/~gitbook/image?url=https%3A%2F%2Flh6.googleusercontent.com%2F2zxDbMsG6VaUsLzNpO0AVF1On0Bl9VCcM0z3GzugHg5_OomWDkpsXk23YEynPog8CPuI3Uhn9omV2kzSeEkenNjHT-HwzNr-b-LXIQKUGKRTyGUmBFe2ZjCVlGl-CZHVfJpAB9VPL5JaNwVgNe_xg90&width=768&dpr=4&quality=100&sign=2a7d8220&sv=2) 1. Enter the amount of assets you want to withdraw from the market in the “Amount” input field. You can withdraw all assets supplied by pressing the “MAX” button next to the wallet balance in the Amount input field. \*The total amount of assets you may withdraw depends on the amount of your supplied assets you have locked as collateral and the market’s current liquidity. ![](https://liqwid-labs.gitbook.io/liqwid-docs/~gitbook/image?url=https%3A%2F%2Flh4.googleusercontent.com%2FAXeJQnH-x4Q4ca_0f3Ic6PMBOc6lu8vJNpCiBhP4RfxgTl7ptNen_U03enjiNWyXE0LAIQvK98UPnB-YuUOAUQCc1dIsrdt_IYbAe7cpN3yaGRWfxZBH89ub5Lf50y06qgGKo5bUOaA4NPBPaog3TR4&width=768&dpr=4&quality=100&sign=16ae56cb&sv=2) 1. Review the “Transaction overview” section to see the current qADA exchange rate you are redeeming at to calculate the total amount of ADA you are receiving as interest (the increase in the qADA exchange rate from when you initially supply to when you withdraw represents your accrued interest). 2. Once you have reviewed the withdrawal action transaction details click the “Withdraw” button at the bottom of the modal and approve the transaction in your wallet. \*To review the withdrawal action transaction hash and details click the “Review transaction details” button. ![](https://liqwid-labs.gitbook.io/liqwid-docs/~gitbook/image?url=https%3A%2F%2Flh5.googleusercontent.com%2Fa3SJJVXyrs9xblLHCagHOX01ItTQC8sqcFTHTA4h-Mqja467g2_CBjluMS5ELLoce9jNkGy6HY--xOAx3SDN1vlv8oktukktvBSBlv-KpFXbX4D1Twzo_dDz9osaoA36qeuxA0atzfYxG5pB63a8Rvc&width=768&dpr=4&quality=100&sign=adc82366&sv=2) [PreviousLQ Token Details](https://liqwid-labs.gitbook.io/liqwid-docs/lq-token-details) [NextLiquidations](https://liqwid-labs.gitbook.io/liqwid-docs/liquidations) Last updated 8 months ago Was this helpful? --- # Interest Rates | Liqwid Docs [](https://liqwid-labs.gitbook.io/liqwid-docs/interest-rates#how-are-interest-rates-calculated-in-liqwid) How are interest rates calculated in Liqwid? ----------------------------------------------------------------------------------------------------------------------------------------------------------- Building on sound macroeconomic models, interest rates (the cost of money) should increase as a direct function of demand; when borrow demand for an asset is low, interest rates should be low, and vice versa when borrow demand is high relative to supply. The utilization ratio **U** for each Liqwid market **a** combines the supply and demand into a single variable: ![](https://liqwid-labs.gitbook.io/liqwid-docs/~gitbook/image?url=https%3A%2F%2F1956931724-files.gitbook.io%2F%7E%2Ffiles%2Fv0%2Fb%2Fgitbook-legacy-files%2Fo%2Fassets%252F-MYzCd96BjSLRMU9mVR_%252F-Mkw4JoFKjh9PKHgXk3I%252F-Mkw9Wa5krL7GAxsdNF0%252Fimage.png%3Falt%3Dmedia%26token%3Dafcf36fa-daff-40e1-b2ae-56da1a325909&width=768&dpr=4&quality=100&sign=817de6cf&sv=2) Governance processes will determine future updates to the demand curve which is represented as a function of utilization Ua. Borrowing interest rates will vary by Liqwid market and will also be updated via governance mechanisms as required in the future. ![](https://liqwid-labs.gitbook.io/liqwid-docs/~gitbook/image?url=https%3A%2F%2F1956931724-files.gitbook.io%2F%7E%2Ffiles%2Fv0%2Fb%2Fgitbook-legacy-files%2Fo%2Fassets%252F-MYzCd96BjSLRMU9mVR_%252F-Mkw4JoFKjh9PKHgXk3I%252F-MkwA56-nX-kP0Y3rVIx%252Fimage.png%3Falt%3Dmedia%26token%3D8822504e-8225-429b-a774-c2038bab9537&width=768&dpr=4&quality=100&sign=67fcd119&sv=2) \*Lending interest is built directly into the qToken Exchange rates. #### [](https://liqwid-labs.gitbook.io/liqwid-docs/interest-rates#what-is-the-risk-free-rate-of-return) What is the risk-free rate of return? [The risk-free rate of return](https://www.investopedia.com/articles/financial-theory/08/risk-free-rate-return.asp) is the theoretical [rate of return](https://www.investopedia.com/terms/r/rateofreturn.asp) of an investment with zero risk. The risk-free rate represents the interest an investor would expect from a risk-free investment over a specified period of time. The real risk-free rate can be calculated by subtracting the current inflation rate from the yield of the Treasury bond matching your investment duration. #### [](https://liqwid-labs.gitbook.io/liqwid-docs/interest-rates#how-are-the-interest-rates-fluctuating) How are the interest rates fluctuating? As mentioned earlier, the interest rate depends on the Utilization rate (Ua), which reflects the ratio between the borrow demand and the amount supplied to the market by lenders. The interest rate of a market A depends on its Ua and fluctuates dynamically as followed: * For every asset, an interest rate is calculated depending on the supply/demand for this asset. * Arbitrages between assets/interest rates is performed by the users by supplying different assets. * A user can supply any supported asset to the protocol. ### [](https://liqwid-labs.gitbook.io/liqwid-docs/interest-rates#risk-mitigation-features-for-markets-experiencing-heightened-borrow-demand) Risk mitigation features for markets experiencing heightened borrow demand Liqwid interest rate models include a utilization ratio we define as the kink point, above which the slope of the rate curve steepens to disincentivize new loans and to incentivize borrowers to repay existing loans and suppliers to deposit assets and capture the increased APY. Once a market's borrow cap is reached, no more new borrowing of the selected assets can be completed. The margin system blocks any new loan if the specific asset supply does not increase once the borrow cap level is reached. Borrows can still be repaid and suppliers are still able to deposit assets in this market. The borrow cap parameter settings for each market can be viewed in the market's details page. [PreviousqTokens](https://liqwid-labs.gitbook.io/liqwid-docs/faq) [NextBrand Kit](https://liqwid-labs.gitbook.io/liqwid-docs/brand-kit) Last updated 1 year ago Was this helpful? --- # Liqwid Community Incentivized Marketing Program (LCIMP) | Liqwid Docs ### [](https://liqwid-labs.gitbook.io/liqwid-docs/liqwid-community-incentivized-marketing-program-lcimp#program-goals) 🎯 Program Goals **Educate:** Demystify Liqwid and Cardano DeFi for new users **Empower:** Reward original, high-signal creators **Amplify:** Spread visibility through community-led content **Decentralize:** Let the DAO decide — top creators are voted in * * * ### [](https://liqwid-labs.gitbook.io/liqwid-docs/liqwid-community-incentivized-marketing-program-lcimp#monthly-rewards) 🏆 Monthly Rewards * **500 LQ distributed per month** * **Top 5 creators receive 100 LQ each** * Selected through on-chain vote via [Agora](https://v2.liqwid.finance/governance) * * * ### [](https://liqwid-labs.gitbook.io/liqwid-docs/liqwid-community-incentivized-marketing-program-lcimp#eligibility) ✅ Eligibility Anyone can enter. To be eligible: * Content must be published between the **1st and 25th** of each month * You must tag `**@liqwidfinance**` or include `**$LQ**` in the post * Use the hashtag `**#LCIMP**` for visibility * Post must be on one of the following platforms: * Twitter (X) * YouTube * Medium or Substack * Reddit (e.g. r/Cardano) * Submit your entry using the monthly submission form found on the: 📍[LCIMP Monthly Form Hub](https://docs.google.com/document/d/1eUpiXJDyJHEm38hfNmIPFXBwSn66CPD2bOdyJ-31Gj4/edit?usp=sharing) * * * ### [](https://liqwid-labs.gitbook.io/liqwid-docs/liqwid-community-incentivized-marketing-program-lcimp#submission-timeline) 📋 Submission Timeline Date Range Phase Day 1–25 Submission window open Day 26 Finalist curation by core team (Ana + Tashoma) Day 27–End DAO vote live on Agora Final Day Top 5 receive 100 LQ each; winners announced on X & Discord * * * ### [](https://liqwid-labs.gitbook.io/liqwid-docs/liqwid-community-incentivized-marketing-program-lcimp#content-standards) 🧾 Content Standards **Relevance:** Must cover Liqwid features, strategies, governance, or Cardano DeFi use cases **Originality:** No plagiarism; repurposed content must add new value **Quality:** Clear, shareable, mobile-optimized **Tone:** Educational and factual * * * ### [](https://liqwid-labs.gitbook.io/liqwid-docs/liqwid-community-incentivized-marketing-program-lcimp#author-verification-and-anti-plagiarism) 🛡️ Author Verification & Anti-Plagiarism To ensure fair rewards: #### [](https://liqwid-labs.gitbook.io/liqwid-docs/liqwid-community-incentivized-marketing-program-lcimp#proof-of-authorship-required) 📌 Proof of Authorship Required * **Twitter/X:** Post or reply publicly with your Cardano wallet address * **YouTube/Medium:** Include wallet address in your description * **Reddit:** Link to your Reddit profile in the form #### [](https://liqwid-labs.gitbook.io/liqwid-docs/liqwid-community-incentivized-marketing-program-lcimp#disqualifications) ❌ Disqualifications * Multi-wallet abuse * Impersonation * Recycled content with no added value If your authorship is challenged, the burden of proof lies with you. * * * ### [](https://liqwid-labs.gitbook.io/liqwid-docs/liqwid-community-incentivized-marketing-program-lcimp#judging-criteria) 📊 Judging Criteria Submissions will be evaluated based on: * Originality and creativity * Technical accuracy * Visual or narrative clarity * Engagement (likes, shares, comments, views) * Educational value to the Cardano DeFi community The top ~20 finalists are selected by the Liqwid Labs core team. DAO voters then determine the top 5. * * * ### [](https://liqwid-labs.gitbook.io/liqwid-docs/liqwid-community-incentivized-marketing-program-lcimp#faqs-quick-version) 🧠 FAQs (Quick Version) **Can I submit more than one post?** Yes ✅ **What if I forget the hashtag?** Reach out to mods on Discord ASAP ⏳ **Can teams enter?** Yes. Rewards can be split across wallets 💡 **What if there's a tie in the DAO vote?** Rewards will be split evenly 🤝 **Where can I get help?** Submit a ticket in discord 📬 Final Notes This program is designed to **reward the Liqwid community** for spreading knowledge, not hype. Keep it clean, fair, and factual. Help us build the most **educational**, **accessible**, and **community-owned** DeFi ecosystem on Cardano. _Start creating. Submit by the 25th._ * * * 🔗 [Liqwid Governance Forum](https://gov.liqwid.finance/t/new-subdao-formation-liqwid-community-incentivized-marketing-program-lcimp/1729) 🔗 [Agora Voting Portal](https://v2.liqwid.finance/governance) [PreviousProtocol Revenue: Net Margin and LQ Buybacks](https://liqwid-labs.gitbook.io/liqwid-docs/protocol-revenue-net-margin-and-lq-buybacks) [NextAPI Documentation](https://liqwid-labs.gitbook.io/liqwid-docs/api-documentation) Last updated 1 month ago Was this helpful? --- # Protocol Revenue: Net Margin and LQ Buybacks | Liqwid Docs ### [](https://liqwid-labs.gitbook.io/liqwid-docs/protocol-revenue-net-margin-and-lq-buybacks#how-is-the-protocol-revenue-distributed) How is the protocol revenue distributed? 80% of all interest paid by the borrowers is immediately distributed to the suppliers who deposited the assets in Liqwid markets. Interest accrued increases the value of your qTokens in real time (continuously increasing qToken Exchange rate). The part of the value created which is not distributed to the suppliers is called the “Net margin”. Currently Net margin is set to 20%, with 50% of this 20% Net margin accruing to LQ stakers in the form of programmatic distributions and 50% to the DAO Treasury reserve. **Function of Programmatic Distributions to LQ Stakers** The programmatic distributions represents the portion of the value created that's distributed back to LQ stakers. **Function of the DAO Treasury reserve** The DAO treasury is collecting reserves to fund future protocol developments and fund developers building products that scale adoption across the Liqwid ecosystem. [](https://liqwid-labs.gitbook.io/liqwid-docs/protocol-revenue-net-margin-and-lq-buybacks#lq-buyback-program) LQ Buyback Program ------------------------------------------------------------------------------------------------------------------------------------- LQ Buyback Program was approved in an onchain governance vote which specifies the full Net margin amount used to buyback LQ which is then distributed to LQ stakers and the Liqwid DAO treasury reserve. [PreviousBrand Kit](https://liqwid-labs.gitbook.io/liqwid-docs/brand-kit) [NextLiqwid Community Incentivized Marketing Program (LCIMP)](https://liqwid-labs.gitbook.io/liqwid-docs/liqwid-community-incentivized-marketing-program-lcimp) Last updated 8 months ago Was this helpful? --- # API Documentation | Liqwid Docs By visiting the API endpoint in your browser, you can explore all available queries, mutations, and types directly. We will focus here on the core concepts and integration basics. ### [](https://liqwid-labs.gitbook.io/liqwid-docs/api-documentation#endpoints) Endpoints The API provides two environments: **Mainnet** for production use and **Preview** for testing. **Mainnet** Copy https://v2.api.liqwid.finance/graphql **Preview** Copy https://v2.api.preview.liqwid.dev/graphql * * * ### [](https://liqwid-labs.gitbook.io/liqwid-docs/api-documentation#request-headers) Request Headers When making requests to the API, please include the following header to help us identify your application: Copy X-App-Source: * * * ### [](https://liqwid-labs.gitbook.io/liqwid-docs/api-documentation#get-basic-markets) Get Basic Markets Copy query GetBasicMarket($input: MarketsInput) { liqwid { data { markets(input: $input) { page pagesCount perPage totalCount results { id displayName supplyAPY borrowAPY lqSupplyAPY batching private delisting exchangeRate receiptAsset { currencySymbol } asset { price logo decimals currencySymbol hexName } } } } } } #### [](https://liqwid-labs.gitbook.io/liqwid-docs/api-documentation#input) Input Copy { "input": { "perPage": 20, "page": 0 } } `perPage` defaults to **20**. If you need more items per request, set a higher `perPage`, or iterate pages . Field Type Description id String Unique market identifier displayName String Prettified market name as displayed in Liqwid. E.g: USDC → wanUSDC. **supplyAPY** / **borrowAPY** / **lqSupplyAPY** Number Annual percentage yield values in decimal form. Multiply by `100` to get the percentage. batching Boolean Indicates whether batching is currently happening. If `true`, you cannot interact with the market. private Boolean If `true`, the market is private and you cannot interact with it. delisting Boolean If `true`, the market is being removed. You cannot supply, only repay or withdraw. exchangeRate Number Used to convert qTokens to the underlying asset. Multiply this value by the number of qTokens a user holds to get the equivalent in the base asset. receiptAsset.currencySymbol String PolicyId of the qToken associated with this market. asset.price Number Price of the asset in USD. asset.logo String (URL) URL to the asset’s logo image. asset.decimals Number Number of decimal places for the asset asset.currencySymbol String PolicyId of the asset asset.hexName String Asset name in hexadecimal format * * * ### [](https://liqwid-labs.gitbook.io/liqwid-docs/api-documentation#build-a-supply-transaction) Build a Supply Transaction Copy query GetSupplyTransactionCBOR($input: SupplyTransactionInput!) { liqwid { transactions { supply(input: $input) { cbor } } } } #### [](https://liqwid-labs.gitbook.io/liqwid-docs/api-documentation#input-1) Input Copy { "input": { "marketId": "", "amount": 0, "address": "", "changeAddress": "", "otherAddresses": [""], "utxos": [""] } } Input field Type Description marketId String The market identifier. Equals `markets.results[X].id`. amount Number Amount **in base units** (no decimals). If you’re pretty-printing amounts, convert back with `amountBase = amount * 10 ** markets.results.asset.decimals`. address String Your **main payment address** (the first from [`walletApi.getUsedAddresses()`](https://cips.cardano.org/cip/CIP-30?utm_source=chatgpt.com) ), prettified as a Bech32 `addr1…`. changeAddress String Address that will receive the change for this tx (usually the same main address). Bech32 `addr1…`. otherAddresses String\[\] All your addresses (Bech32 `addr1…, getUsedAddresses,` `getUnusedAddresses`). utxos String\[\] Returns the UTXOs of your wallet as returned by `walletApi.getUtxos()`. #### [](https://liqwid-labs.gitbook.io/liqwid-docs/api-documentation#what-you-receive-and-how-to-submit) What you receive & how to submit The resolver returns a **CBOR** transaction body (`cbor`) ready to be **signed** and **submitted**. Option A — Submit via your wallet (CIP-30) Option B — Submit via our API Copy mutation SubmitTransaction($input: SubmitTransactionInput!) { submitTransaction(input: $input) } #### [](https://liqwid-labs.gitbook.io/liqwid-docs/api-documentation#input-2) Input Copy { "input": { "signature": "", "transaction": "" } } * **signature** — the result of `signTx()` * **transaction** — the unsigned transaction CBOR you received from our `supply` query * * * ### [](https://liqwid-labs.gitbook.io/liqwid-docs/api-documentation#build-a-withdraw-transaction) Build a Withdraw Transaction Copy query GetWithdrawTransactionCBOR($input: WithdrawTransactionInput!) { liqwid { transactions { withdraw(input: $input) { cbor } } } } #### [](https://liqwid-labs.gitbook.io/liqwid-docs/api-documentation#input-3) Input Copy { "input": { "marketId": "", "amount": 0, "address": "", "changeAddress": "", "otherAddresses": [], "utxos": [] } } #### [](https://liqwid-labs.gitbook.io/liqwid-docs/api-documentation#input-fields-same-as-supply-except-amount) Input fields (same as [**supply**](https://liqwid-labs.gitbook.io/liqwid-docs/api-documentation#input-1) , except `amount`) All other input fields follow exactly the same rules as for **supply**: `marketId`, `address`, `changeAddress`, `otherAddresses`, and `utxos`. #### [](https://liqwid-labs.gitbook.io/liqwid-docs/api-documentation#amount-for-withdraw) `amount` for withdraw * The user **holds qTokens**, but `withdraw.amount` expects the **asset amount in base units (no decimals)**. * If your UI works in **qTokens**, convert to **asset units** with the market’s `exchangeRate`, then to **base units** using `decimals`. * * * ### [](https://liqwid-labs.gitbook.io/liqwid-docs/api-documentation#custom-fees) Custom Fees If you need to add a **specific fee** for a transaction or integration, please create a support ticket in our [Discord](https://discord.gg/PZ3GUWamY8) . * * * ### [](https://liqwid-labs.gitbook.io/liqwid-docs/api-documentation#issues-and-complex-integrations) Issues & Complex Integrations If you encounter any **issues** or require help with a **more complex integration**, please create a support ticket in our [Discord](https://discord.gg/PZ3GUWamY8) . [PreviousLiqwid Community Incentivized Marketing Program (LCIMP)](https://liqwid-labs.gitbook.io/liqwid-docs/liqwid-community-incentivized-marketing-program-lcimp) Last updated 4 months ago Was this helpful? ---