What You Can Do With Liquid Loans (It's Not Just Lending)

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By Connor
Estimated reading: 5mins
Liquid Loans dApp

As the first platform of its kind on PulseChain, Liquid Loans introduces a non-custodial, immutable, and governance-free way to take out 0% interest loans.

But in addition to its use in decentralized lending, the Liquid Loans ecosystem also gives participants access to a wide variety of features.

Here are some of the ways that Liquid Loans is empowering users and creating value for the crypto market as a whole. 

1. Extract value from $PLS while #NeverSelling

Liquid Loans is committed to allowing the crypto community to access value without ever having to sell their crypto. 

Until now, the main way for crypto holders to quickly access liquid capital has been to cash out their beloved digital assets and investments for fiat currencies.

Now, thanks to Liquid Loans, you can easily extract value from your PLS without having to part way with your coins.

This is enabled through Liquid Loans’ immutable and transparent protocol. It allows anyone to temporarily lock up a portion of their PulseChain (PLS) in individual smart contracts known as vaults. In exchange, users are given a stablecoin known as USDL.

USDL is an algorithmic stablecoin designed to always be worth $1 USD. When a user locks up PLS in their vault as a collateral, USDL is minted and given to the vault owner. 

In other words, you can easily use the Liquid Loans ecosystem to temporarily lock away a portion of your crypto in exchange for a truly decentralized stablecoin that you can spend freely.

Best of all, this is handled through an unchangeable interest-free loan on a timeless repayment schedule. With Liquid Loans, you never have to worry about accruing interest or being pressured to turn your USDL back into PLS.

Since USDL maintains a stable value and can easily be spent, this process is a great way to temporarily turn your PLS into a stable currency that you can use to buy goods and services.

Being able to access value in this way is particularly useful due to the fact that many parts of the world have made selling crypto a taxable event. By minting USDL, however, you can access a stablecoin that you can freely spend without selling and incurring unnecessary taxes.

2. Earn Yield Through a Trustless Protocol

In addition to letting users access value without selling, Liquid Loans also gives anyone the ability to passively earn money.

When you collateralize your PLS, you are given USDL. While you are able to spend this USDL freely, you also have the option to directly invest USDL back into the network.

The Liquid Loans ecosystem is decentralized and robust thanks to the network of users across the world who contribute to its stability. These Stability Providers invest USDL back into the network and are rewarded with a generous APR on their yield.

This means that investing USDL into Liquid Loans’ Stability Pool is a great way to earn passive income while supporting the decentralized landscape as a whole.

Unlike other staking protocols, there is no minimum lockup duration. Instead of being locked into the network for a set period of time, you can freely withdraw your USDL depending on your needs.

Additionally, users can obtain LOAN token and deposit it into the Staking Pool. As a reward, stakers earn a pro rata share of the redemption and borrowing fees of the protocol. 

3. Access a Truly Decentralized Stablecoin

Stablecoins are a vital part of the decentralized ecosystem, but the lionshare of the total stablecoin supply is made up of coins that are actually centralized.

Liquid Loans is addressing a significant need in the broader crypto market by introducing a capital-efficient and user-friendly way to access a decentralized stablecoin.

USDL functions as an algorithmic stablecoin that is pegged at a 1:1 ratio with the US dollar. In addition, it is issued by transparent smart contracts that can easily be audited.

Further, USDL is an entirely community-led stablecoin. Its founders have no control over the network, as USDL was created without admin keys in order to be entirely governance-free. 

When USDL is minted, the transparent smart contract that is used to carry out this process is completely immutable. In other words, it cannot be changed by anyone.

In addition, while some stablecoins are difficult to convert to other currencies, USDL is directly redeemable for the equivalent US dollar worth of PLS. To ensure this constant access to liquidity, the Liquid Loans protocol is designed to always be over-collateralized.

4. Be ‘The Bank’ and Collect Fees

In addition to PulseChain (PLS) and USDL, a third digital token exists within the Liquid Loans ecosystem. This token is called LOAN.

Anyone can purchase LOAN to join the global community of LOAN token holders. In addition, LOAN can also be earned when you invest USDL into the network.

By staking LOAN tokens, you receive a share of the fees that are collected by the protocol.

As a decentralized ecosystem, Liquid Loans is entirely free from the pressure and control of central intermediaries such as banks. Instead, it is the community itself that ensures the liquidity and stability of the network and gets to claim all of the rewards.

When you stake LOAN, you earn a share of the fixed fees that users pay when borrowing or redeeming USDL.

Through this system, it is the community itself that has complete control over Liquid Loans.

The Bottom Line

In addition to serving as the most fair and user-focused lending platform of its kind, Liquid Loans has so much more to offer. It is designed to serve a wide variety of use cases and introduce a truly decentralized stablecoin to the broader crypto community.

Liquid Loans Uses

Whether you are using Liquid Loans to access funds without selling your holdings, earn yield on your investment, access a decentralized stablecoin, or have financial autonomy, you can rest easy knowing that you are engaging with a transparent and governance-free protocol.

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Disclaimer:Please note that nothing on this website constitutes financial advice. Whilst every effort has been made to ensure that the information provided on this website is accurate, individuals must not rely on this information to make a financial or investment decision. Before making any decision, we strongly recommend you consult a qualified professional who should take into account your specific investment objectives, financial situation and individual needs.

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Connor is a US-based digital marketer and writer. He has a diverse military and academic background, but developed a passion over the years for blockchain and DeFi because of their potential to provide censorship resistance and financial freedom. Connor is dedicated to educating and inspiring others in the space, and is an active member and investor in the Ethereum, Hex, and PulseChain communities.

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