Waterslide Review - DeFi Frontend for the Liquity Protocol

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Waterslide Review - DeFi Frontend for the Liquity Protocol
Table of Contents
Table of Contents

The Decentralized Financial ecosystem (DeFi) provides products and services that are worth knowing about. If you are looking for new opportunities to make money in the crypto space, don't miss out on the great possibilities offered by Waterslide and Liquity protocol.

Through Waterslide, you will be able to take out loans at a minimum 110% collateral ratio with no term and 0% interest rate. Research the different strategies that exist to get the best return on your investments.

What is Waterslide Liquity?

Waterslide is the first decentralized Frontend for the Liquity Protocol running on the Internet Computer.  Frontends allow their visitors to interact with Liquity's Ethereum smart contracts through a beautiful user interface. The synergies between both Ethereum and the Internet Computer allow for completely decentralized DApps for DeFi.

Take advantage of the excellent opportunity waterslide offers for early adoption. Those users who deposit through their Frontend receive a 99% kickback rate. This means that 99% of LQTY rewards from stability pool deposits through their Frontend go directly into your pocket. As the Frontend is built out and new functionality is added, the kickback rate will decrease over time.

The Waterslide designers are revamping the entire Frontend. Custom skins and additional features are being created to offer you the best service.  Use the current Frontend and come back from time to time to see how it evolves and what new features are added. Some of the features that Waterslide is planning to add are:

  • Make use of Chain Key cryptography when it's available. Canisters will definitely be able to hold Ether and Bitcoin. They believe that this will lead to a Cambrian explosion for DeFi on the Internet Computer and result in mechanisms and dApps that have been unimaginable before.
  • Use DSProxy to execute multiple contract calls in one transaction.
  • Try and experiment with further synergies between the Internet Computer's capabilities in combination with DeFi on Ethereum.

Don't wait any longer and try waterslide.app (note: At the moment, you need to have MetaMask installed, but Waterslide will definitely support other wallet providers soon).

Dashboard Interface

LUSD & LQTY Tokens

LUSD is a stable coin that remains roughly pegged to the US Dollar:

1 LUSD = 1 USD

Once you have taken out your loan, you'll receive LUSD. You can spend it on any assets you predict will appreciate and profit from these purchases without spending your ETH.

Instead of spending your LUSD on some other cryptocurrency, you also have the option of depositing it in Liquity’s stability pool. This means that you temporarily deposit your LUSD in the protocol. In return, you get LQTY (the reward token for the protocol) as well as small amounts of ETH when people’s positions get liquidated.

What is Liquity?

Liquity is a decentralized lending protocol that allows users to borrow money against an underlying collateral payment (ETH), similar to how high street banks enable people to borrow money against tangible collateral (often cash or real estate). Loans are paid out in LUSD and need to maintain a minimum collateral ratio of only 110%.

Third-party frontend applications and integration services access Liquity. To access the system, you need to choose a web interface (frontend) such as Waterslide. The economic incentive to run a Frontend is that they can set their kickback rate. In simple terms, kickback rates determine the percentage of the rewards users receive and how much is paid to the front end of the protocol. Waterslide, for example, has set a kickback rate of 99%. This means that 99% of the rewards go straight into your pocket and 1% to Waterslide.

There are two different ways to generate revenue using Liquity:

  1. Deposit LUSD to the Stability Pool and earn liquidation gains and LQTY rewards.
  2. Stake LQTY and earn the revenue from issuance fees (in LUSD) and redemption fees (in ETH).

In the following guide, you'll find different strategies to minimize your risk profile to keep your funds safe.

Some key improvements differentiate Liquity from the numerous current DeFi lending protocols, such as AAVE, Compound,  Maker, etc. If you are familiar with Maker DAO already, this video lists the ten key differences between the two.

For more information, please visit the Liquity Protocol website.

Would it be possible to use the ICP as collateral instead of ETH in the future?

There are two possible ways on how to use ICP as collateral instead of ETH:

  • Directly: The Liquity Protocol received funding from the Beacon Fund. The Beacon Fund is DFINITY's ecosystem venture capital, led by Polychain Capital and backed by a16z and the DFINITY Foundation. This quote is from their website: "Beacon is an investment fund focused on sourcing, evaluating, and supporting world-class applications and services built on the Internet Computer." The funding and the fact that the founder and CEO Robert Lauko used to work for DFINITY speak to the fact that the Liquity Protocol might soon be available natively on the Internet Computer, probably with ICP as collateral. This would be the direct way of using ICP as collateral on the Internet Computer version of protocol.
  • Indirectly: Some teams are actively working on building a ICP<>ETH bridge, something that Chain Key Technology is aiming to provide natively soon. If this bridge comes to life, it will enable users to directly swap their ICP for ETH which could then be used with the Liquity Protocol. Unfortunately, this way you are tied to the changes in value of ETH, not ICP. This would be the indirect way.

Why are Waterslide and Liquity better together?

Websites that interact with smart contracts on Ethereum were often hosted on centralized cloud providers like AWS (Amazon Web Services). This opens the door to censorship, platform risks, regulations, and attacks. As long as the DeFi interfaces people use are hosted on cloud platforms, DeFi applications are vulnerable.

Waterslide is a Frontend for a protocol whose smart contracts run on Ethereum, while Waterslide itself is hosted on the Internet Computer. Waterslide is harnessing the power of both networks, which is making it truly decentralized. The Internet Computer enables the hosting of secure Frontends, making every facet of DeFi applications uncensorable.

Upcoming objectives

Waterslide wants to be exceptionally decentralized and secure and intends to stand out with its extraordinary design. This project would like to position itself as a DeFi hub that develops and hosts secure and user-friendly Frontends for different projects.

After implementing new functionality and the new design of Waterslide Frontend, the team ​is also thinking about building a token model that would allow waterslide users to become part-owners at the same time. The token model would be very close to the Internet Computer model in terms of governance, and holders will vote on proposals that decide the future of the service.

Additionally, the token owners would receive a share of the revenue Waterslide generates in proportion to their stake. In the best-case scenario, the foundation will release their Service Network System (SNS) in a way that makes it a bit customizable to tweak it to fit their needs.

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  • Disclaimer: The views and opinions expressed on this website are solely those of the original author and other contributors. These views and opinions do not necessarily represent those of the Dfinity Community staff and/or any/all contributors to this site.

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