Note: Liquity is not responsible for these projects.
Liquity V2 is a new borrowing protocol that lets users deposit ETH or LSTs as collateral and mint the stablecoin BOLD.
The main improvements compared to V1 are:
- User-set rates, enabling fixed and market-driven rates
- LSTs as collateral, allowing the use of ETH, wstETH, and rETH
- New redemption mechanism, not tied to LTV and less frequent
- Improved liquidity via PIL
- A better peg mechanism
- Lower liquidation penalty
- New use-cases for LQTY
BOLD is the USD-pegged stablecoin issued in Liquity V2. It is over-collateralized and backed only by WETH, wstETH, and rETH.
In contrast to most of its competitors, BOLD is a resilient stablecoin by design:
- Only backed by crypto assets (no real-world assets or custody by centralized players)
- Not subject to collateral changes and protocol upgrades (immutable)
- Directly redeemable (always convertible in a fast and liquid way)
There are 4 main use cases:
- Borrow BOLD
- 1-click leverage staked(ETH)
- Earn yield by depositing BOLD
- Stake LQTY to direct PIL and earn
There are a few ways:
- Stability Pool Deposits: Earn rewards by depositing BOLD into the various Stability Pools.
- Protocol Incentivized Liquidity: Supply liquidity for BOLD onto the incentivized external DEXes.
- Stake LQTY: Users accrue voting power over liquidity incentives by staking LQTY. On top of directing emissions, LQTY stakers can potentially receive protocol fees and bribes (subject to governance vote). As an added bonus, your staked LQTY on V2 receives protocol revenue from Liquity V1.
In Liquity V2, users can set their own interest rates, giving them full control over costs and improving predictability. This feature allows for adaptability to various market conditions and helps stabilize BOLD's peg.
User-set interest rates facilitate a capital-efficient equilibrium between BOLD borrowers and holders in a fully market-driven manner. Additionally, these rates serve as the primary revenue source for BOLD holders, generating a continuous, sustainable real yield for BOLD depositors and liquidity providers.
Read more about user-set rates here.
Looping allows you to borrow BOLD against your deposited collateral (ETH or LSTs) and use it to buy more collateral, increasing your exposure to the underlying. The process is fully automated and can be done with one click.
Staking your LQTY in Liquity V2 unlocks a unique, dual-reward opportunity. Not only do you gain influence over the future of Liquity V2, but your stake also continues to earn LUSD and ETH rewards from Liquity V1. This powerful synergy ensures you capitalize on both the stability of V1 and the innovations of V2.
Liquity V1 is here to stay: it is battle-tested and LUSD is the stable of choice for users who prefer a pure ETH backing.