> For the complete documentation index, see [llms.txt](https://guides.instadapp.io/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://guides.instadapp.io/protocols/liquity.md).

# Liquity

Liquity is a new decentralized borrowing protocol designed to generate unprecedented liquidity against ETH as collateral!

![Issuing Liquidity interest-free was never so easy and smooth!](https://instadapp-labs.intercom-attachments-1.com/i/o/466165011/db45b9533de59d502c8576a9/1-i4wlA3hTa9ujxifF_Rcvzw.png)

### What is Liquity?

Liquity allows you to draw 0% interest loans against Ether used as collateral. Loans are paid out in LUSD — the protocol’s native stablecoin which is pegged to the US Dollar and need to maintain a [minimum collateral ratio ](https://docs.liquity.org/faq/borrowing#what-is-the-minimum-collateral-ratio-mcr-and-the-recommended-collateral-ratio)of only 110%.\
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Also, the loans are secured by a LUSD [Stability Pool](https://docs.liquity.org/faq/stability-pool-and-liquidations) and by fellow borrowers collectively acting as guarantors of last resort. Liquity as a protocol is noncustodial, immutable, and governance-free.