๐ธGLoans
GLoans provides interest-free ETH-collateralized loans via the Liquity protocol โ borrow LUSD stablecoin with no interest charges, 100% self-custodial.
GLoans is Gemach's interest-free lending frontend, powered by the Liquity protocol. It lets you borrow the LUSD stablecoin by depositing ETH as collateral โ with zero ongoing interest, censorship resistance, and full self-custody.
Overview
Liquity is a decentralized borrowing protocol that allows ETH holders to draw 0% interest loans in LUSD. GLoans is Gemach's frontend to that protocol โ adding privacy infrastructure, load-balanced uptime, and a streamlined interface on top of the battle-tested Liquity smart contracts.
Access GLoans: stake.gemach.io
Key Properties
Collateral
ETH only
Borrowed asset
LUSD (USD-pegged stablecoin)
Interest rate
0% โ no ongoing interest charges
Minimum collateral ratio
110% (maximum LTV: ~90.9%)
One-time fee
Small issuance fee at time of borrowing (algorithmically determined)
Redemption
LUSD is always redeemable for $1 of ETH at face value
Governance
None โ fully algorithmic, no admin keys
Kickback
80% of all network fees and rewards pass through to users
How It Works
Borrowing (Opening a Trove)
Deposit ETH โ Lock ETH in a smart contract (called a "Trove") as collateral
Borrow LUSD โ Receive LUSD up to the limit defined by your collateral ratio
Use LUSD โ Spend, swap, or deploy LUSD anywhere it is accepted
Repay when ready โ Return LUSD at any time to close or adjust your Trove โ no repayment schedule, no deadline
Earning on the Stability Pool
Beyond borrowing, you can deposit LUSD into the Stability Pool to earn:
ETH liquidation gains โ when under-collateralized Troves are liquidated, Stability Pool depositors receive their share of the ETH collateral
LQTY rewards โ protocol reward tokens distributed continuously to Stability Pool depositors
Staking LQTY
Stake LQTY to earn a pro-rata share of borrowing and redemption fees generated by the protocol, paid in ETH and LUSD.
Collateral Ratios and Liquidation
Safe zone
> 150%
No liquidation risk
Recovery mode boundary
~150%
Monitor closely
Minimum requirement
110%
Immediate liquidation risk if breached
โ ๏ธ Warning: If your Trove's collateral ratio drops below 110% (or below the system collateral ratio during Recovery Mode), your Trove can be liquidated. Monitor ETH price movements carefully and maintain a comfortable buffer above the minimum ratio.
Key Advantages
Interest-free borrowing โ Liquity charges a one-time issuance fee when you open a Trove, but there is zero ongoing interest. You can hold a loan open indefinitely at no additional cost.
Censorship-resistant โ The Liquity smart contracts have no admin keys and cannot be paused, modified, or shut down by any party. GLoans simply provides a frontend to these immutable contracts.
Redeemable stablecoin โ LUSD maintains its peg via a hard redemption mechanism: any holder can redeem 1 LUSD for $1 worth of ETH from the lowest-collateralized Troves at any time. This creates structural backing independent of market sentiment.
80% kickback โ GLoans passes 80% of network fee revenue back to users. The remaining 20% funds Gemach operations and development.
Getting Started
1. Navigate to GLoans
Open stake.gemach.io in a browser with a Web3 wallet extension installed.
2. Connect Your Wallet
Connect MetaMask, WalletConnect, or another Ethereum-compatible wallet. Ensure you have ETH on Ethereum mainnet.
3. Open a Trove
Enter the amount of ETH to deposit as collateral and the amount of LUSD to borrow. The interface will show your resulting collateral ratio. Aim for at least 150% to stay safely above the liquidation threshold.
4. Confirm the Transaction
Approve the transaction in your wallet. Once confirmed, LUSD will appear in your wallet and your ETH is locked as collateral.
5. Manage Your Position
Monitor your collateral ratio as ETH price moves. Add collateral or repay LUSD if the ratio drops toward the minimum threshold.
Risks and Disclaimers
โ ๏ธ Warning: Borrowing against volatile collateral carries liquidation risk. ETH price drops can quickly move your position toward the minimum collateral ratio. Always maintain a safety buffer and monitor your position regularly.
Liquidation risk โ ETH price volatility can trigger liquidation if your collateral ratio falls below 110%
Smart contract risk โ Liquity is extensively audited but no smart contract is 100% risk-free
Redemption risk โ If ETH/LUSD price conditions trigger mass redemptions, your Trove may be partially redeemed against (you receive equivalent ETH value in return)
Resources
Borrow LUSD and manage your position
Underlying protocol documentation
How LUSD works and peg mechanics
Gemach's algorithmic money markets on Arbitrum
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