Overview
LIQ Protocol is a decentralized on-chain liquidation engine system powering derivatives markets on Serum and lending platforms on Solana. The protocol plays a key role in the Solana and Serum ecosystem. By managing liquidations and providing capital across several different derivatives and lending platforms, the overall usability and health of the platforms are substantially increased, which helps further advance the ecosystem.
Just as we help the ecosystem grow, it also strengthens the protocol, as the liquidators profits are used to buy-back LIQ on the open market, and redistributed back to LIQ liquidity providers. A portion of the profits are also redistributed back to the insurance fund to keep up with continuous growth and expansion. To manage the risk of holding volatile assets in the liquidators required holdings, the liquidators assets are constantly hedged to keep a delta-neutral position. Powered by Solana
Solana is a high-performance and permissionless blockchain that is part of the next generation of cryptocurrency technology. Solana works via Proof of History (PoH), PoH operates through sequential functions. Solana is able to currently handle over 50,000 transactions per second with near-zero latency, and has a theoretical maximum of over 700,000 transactions per second.
Serum Ecosystem
Serum is a decentralized exchange (DEX) and ecosystem that brings unprecedented speed and low transaction costs to decentralized finance. It is built on Solana and is completely permissionless. LIQ Protocol strengthens the Serum Ecosystem and keeps margin exchanges built on Serum healthy by handling liquidation events, and keeping margin accounts balanced on different lending platforms.
Liquidation Engine
The liquidator is a program that initiates the liquidation process. It is permissionless and decentralized. The liquidator checks for overexposed accounts, prepares those accounts for liquidation, then provides funds to the liquidated accounts liabilities, and in return receives funds from the liquidated account’s collateral.
You can currently trade on markets powered by LIQ Protocol at:
The LIQ Protocol holds the following utility:
A pool that allows users to provide liquidity to LIQ, in turn earning fees back from the liquidators profits by staking LP tokens. The liquidators profits are split between going back to the liquidators insurance fund, and buying back LIQ for liquidity provider rewards.
LIQ Protocol participating in the liquidation process, in turn, provides liquidity for further advancing the ecosystem, and builds the insurance fund for the liquidation engines
A limited governance model allowing stakers to make decisions on the liquidation engine process and holdings, such as determining markets and pairs for the protocol to manage
Below are the platforms LIQ Protocol is currently working with: