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Liquity’s LUSD Flywheel with Chicken Bonds explained

LUSD, or Liquity USD from Liquity protocol, is currently trading above its peg of US$1.

There are several reasons for the above-peg LUSD stablecoin but the main drivers of its demand are:

  • Capital efficiency of ETH deposits to create LUSD
  • Yield in the stability pool
  • Chicken Bonds

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