The 3 Different Layers of Liquid Loans (Super Important Distinctions)

This might surprise some folks – Liquid Loans is not one singular 'thing'!

It actually has three different layers, and understanding the distinction between the three categories can help you understand the nature of True DeFi.

Let’s start with Liquid Loans: The Code.

Liquid Loans: The Code

If you’re going to refer to one entity as “Liquid Loans”, then it would be the code.

The Liquid Loans code is the product.

It is what enables the lending, the staking, the stability providing, the generation of USDL and LOAN, and the redemptions.

The code exists on PulseChain, it is immutable (cannot be changed, and there is no admin keys), governance-free, and there is only one iteration of it.

No matter who you are, the Liquid Loans code acts the exact same and operates in accordance with the rules of the protocol.

The code will exist and function regardless of whether the founders, the team, or the front end are present and operational.

Liquid Loans: The Team

The Liquid Loans team is a group of people from all over the world who came together to build something cool.

The team is composed of founders, software developers, web designers, social media experts, writers, digital marketers, graphic designers, and more.

Once the Liquid Loans code is deployed, it will run the exact same way regardless of what the team does.

The whole point of ‘True DeFi’ is that you do not have to rely on a central team to manage the protocol. 

Rather, the protocol does what it is supposed to do even if the team is not active.

Liquid Loans: The Front End

The Liquid Loans Front End, also referred to as the Dapp, is a website that interacts with the Liquid Loans code.

The front end was created by the Liquid Loans Team with the intention of being the most user-friendly, intuitive and enjoyable experience possible.

However, the Liquid Loans front end is not the only one that interacts with the code.

There can, and likely will be, many front ends for Liquid Loans, which is an important component of ‘True DeFi’.

Front ends can be created by anyone from anywhere in the world – which means if the Liquid Loans front end goes offline, users of the protocol code can simply connect to one of these other front ends.

It is important to understand that while front ends can be changed, the Liquid Loans code CANNOT EVER be changed.

Make sure you vet and trust the front end you are using.

The Bottom Line

"Liquid Loans" has three different layers which allows it to be truly-decentralized.

The Liquid Loans code is different from the team which is different from the front end.

Other centralized entities, like Coinbase, do not have the same compartmentalization.

The company runs the order books, deposits, reserves, front ends, CEX token, media, and everything else.

So the next time you're using the community-owned Liquid Loans protocol, drop us a like or comment on X and interact with all of the layers!