Liquid Finance employs a two-token system comprised of lqETH and LIQD to address liquidity provisioning issues. The protocol can mint and redeem lqETH, a fractional-reserve token pegged to the price of ETH. It maintains price stability and collateralizes itself through its proprietary Liquid Arbitrage Mechanism (LAM).  LIQD is the protocol token, and its value will be stabilized in the long run by its ability to earn a share of the protocol's revenue when staked in the staking contract.