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Liquid Finance is a liquidity provisioning model designed to tackle problems around wasted capital and where value is accumulated.
Key Benefits and Features of Liquid Finance:
Captures MEV opportunities generated by liquidity pools-normally taken by searchers-through the Liquid Arbitrage Mechanism (LAM).Addresses capital inefficiency in liquidity provision by using the fractional-reserve framework from Frax Finance, aiming for improved scalability so DeFi can better rival traditional finance.Provides farming and bonding incentives for a limited time to encourage quicker adoption and expand the protocol’s reserves.Uses bonds to form Protocol Owned Liquidity (POL), which is intended to improve LIQD’s price stability.Distributes protocol revenue in ETH to LIQD token stakers and lockers. Also, users who lock LIQD for an 8-week period receive forfeited vesting rewards in the form of LIQD.LIQD is the protocol token, and its value is intended to be reinforced by earning a portion of the protocol’s revenue when staked in the staking contract. It additionally helps support undercollateralized redemptions of the lqETH token.
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