Liquid Finance is an innovative approach to liquidity provisioning that solves capital inefficiency and value accrual issues. Liquid Finance attempts to solve the problems of liquidity provisioning using a two-token system comprised of $lqETH and $LIQD. $lqETH is a fractional-reserve token pegged to the price of $ETH, which can be minted and redeemed by the protocol. It maintains price stability and collateralizes itself using the Liquid Arbitrage Mechanism (LAM).
$LIQD is the protocol token, the value of which will ultimately be stabilized by its ability to earn a share of the protocol’s revenue when staked in the staking contract.