The world’s largest crypto exchange Binance holds a significant portion of the supply of Liquidity (LQTY). Meanwhile, altcoin price is performing dazzling in the market.
Binance accumulates altcoin whose price is flying
The price of Liquidity, LQTY, has risen more than 40% since the start of the week to $3.37 per token, hitting a 12-month high. Price action has made LQTY one of the most profitable crypto assets of recent days among the top 200 by market cap. One of the reasons for the renaissance of both Liquity and its native token, which has been off the radar for two years, may be the crisis in the stablecoin industry, where many major players have turned their attention to the protocol.
Among these major players is Binance, the world’s leading crypto exchange, which has managed to become the second largest owner of LQTY. It seems that the black-and-yellow exchange has managed to accumulate more than 11.5 million coins in their wallets in the past four days. This equates to 11.5% of the total LQTY supply.
What’s behind the rise of LQTY?
LQTY’s price surge comes amid growing interest in stablecoins following the depeg of USD Coin and the shutdown of several crypto-friendly banks. LQTY, the native token of decentralized borrowing protocol Liquity, has garnered a lot of attention after the chaos caused by the depegging of the USDC of Circle, the second-largest stablecoin by market capitalization.
The price of LQTY, the secondary token of decentralized borrowing protocol Liquity, has increased by nearly 20% in the last 24 hours, placing it among the best performing cryptoassets of the era. Also, LQTY is up nearly 500% since the start of the year and was trading around $3.33 at press time.
The latest price action came after investors turned against Circle’s USDC stablecoin. The loss of the dollar-pegged cryptocurrency was a win for Liquity, a decentralized platform for borrowing in LUSD, the protocol’s primary token. Liquity’s LUSD “clearly managed to take center stage during the USDC depeg panic, which probably caused some investors to take a second look at LQTY,” says Andrew Thurman, head of research at Nansen data company.
Binance holds a significant portion of the total LQTY supply
Liquidity’s secondary token, LUSD, has seen the rise, while LUSD is intended to maintain its dollar peg. LQTY has a total supply of 100 million and a market capitalization of $314 million. Nansen data shows a 10% increase in wallets holding the LUSD stablecoin since March 6. This is indicative of a new stablecoin narrative after USDC’s depeg.
Liquidity allows users to deposit Ethereum (ETH) as collateral to the protocol and borrow in LUSD, the stablecoin pegged to the US dollar. Instead of applying a variable interest rate to take out a loan, Liquidity has a 0% interest rate that charges users a one-time fee. With a total locked value (TVL) of $683 million, Liquity generated lifetime revenue of $30 million, according to data aggregator DeFiLlama. According to a dashboard created by a Liquidity developer, as of March 11, users borrowed approximately $4.5 billion in LUSD.
Currently, more than 52 million LQTYs have been staked, worth approximately $184 million, representing 52% of the total LQTY supply according to blockchain explorer Etherscan. Binance, which started trading for LQTY/BTC and LQTY/USDT spot pairs on February 28, now holds roughly 11.57% of the total LQTY supply, according to data from blockchain analytics firm Nansen.
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