The native token of the decentralized lending protocol Liquity, LQTY, has seen an 80% increase in price over the past month, standing out from the overall negative sentiment in the cryptocurrency market. The surge in price can be attributed to the growing interest in the protocol.
LQTY Price Rises During Bitcoin and Altcoin Downturn
Liquity is a borrowing and lending platform where users can borrow a stablecoin called LUSD, which is pegged to the US dollar at a 1:1 ratio, by staking Ethereum (ETH) as collateral.
The protocol’s native token, LQTY, which was trading at $0.75 a month ago, is now hovering around $1.35. When compared to larger altcoins in terms of market capitalization, the performance of this altcoin becomes even more interesting. While Bitcoin‘s (BTC) price increased by 2% during the same period, the price of ETH decreased by 3% and Solana’s (SOL) price increased by 20%.
As expected, the market capitalization has also increased along with the price of LQTY, currently standing at approximately $120 million. However, as a sign of how volatile small altcoins can be, the price of this altcoin decreased by over 10% in the past 24 hours without any specific news or developments.
Protocol’s Network Activity Rewarded with A Grade
A Liquity spokesperson highlighted a significant increase in protocol activity over the past month, emphasizing its contribution to the price surge.
Approximately $625,000 was collectively paid to users who staked LQTY last month. Users can utilize the LQTY staking pool to stake LQTY and earn protocol fees paid in LUSD and ETH.
The spokesperson also mentioned that the independent stablecoin agency Bluechip recently awarded the protocol with an A grade, which may have further contributed to the price increase.