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