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Cardano: Liqwid Finance will enable ADA holders to earn yield

  • Cardano users will be able to earn the LQ governance token by providing liquidity while staking their ADA.
  • Liqwid Finance will be deployed with the last hard fork combinator event tentatively scheduled for Q2 2021.

There is much hype in the Cardano community about the deployment of the Goguen era and the decentralized finance capabilities. With the addition of smart contracts, the creation of native tokens, interoperability with Ethereum and other tools, Cardano is one of the projects to watch in 2021.

Liqwid Finance, one of the winners of the Wyoming Hackathon 2020, has answered community questions about its operation. Once all the components of Goguen are introduced into the mainnet, Liqwid Finance will allow its users to earn the LQ governance token by providing liquidity. The Liqwid Finance team stated:

(…) same time as Goguen hardfork the v1 will go live; a fair token launch combo of user distribution and yield farming contracts will allow everyone to earn LQ governance tokens.

How to start earning yields with Cardano’s DeFi?

The innovative aspect of Liqwid Finance’s protocol is that it will allow users to provide liquidity with ADA without losing their staking rewards. In that sense, the Liqwid Finance team clarified that they will not airdrop the LQ governance token, only users who provide liquidity with ADA or other native assets will be able to earn the token through yield farming.

Airdrop implies we are giving away $LQ tokens for free which is absolutely not the case. We are experimenting in a fair token launch to incentivize early liquidity to the protocol.

At the moment, the Liqwid Finance team is producing the necessary material to familiarize users with the operation of their protocol in detail. Therefore, they are also working with Cardano content producers to ensure that the guides on the protocol have user safety as a priority.

Behind the Liqwid Finance protocol, there is a team composed of members who come from traditional finance. Therefore, the “tokenomics” and incentive model has been designed to have a “deep connection” with the protocol’s governance model.

Liqwid Finance could be one of the first DeFi protocols for Cardano to compete with Compound, Aave, MakerDAO, Yearn.Finance and others in the Ethereum DeFi ecosystem. The Liqwid Finance teams claims to have created an alternative that will make them stand out from the competition:

They all have unique tokenomics implementations but functionally they’re all doing the same thing: serving as coordinating mechanisms for the protocol’s governance layer.

As reported by CNF, the last hard fork combinator for Goguen has a tentative launch date of Q2 2021, although IOHK CEO Charles Hoskinson recently stated that this will largely depend on the results of the stress test of Cardano’s smart contract platform, Plutus.

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Reynaldo Marquez has closely followed the growth of Bitcoin and blockchain technology since 2016. He has since worked as a columnist on crypto coins covering advances, falls and rises in the market, bifurcations and developments. He believes that crypto coins and blockchain technology will have a great positive impact on people's lives.

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