A new chapter will soon be underway for Liquity with the launch of V2 and BOLD.

But it’s not just BOLD that’s being powered by the Liquity V2 codebase. Following thorough audits and verification work done by Dedaub, Recon, ChainSecurity, Coinspect, and Certora, the V2 codebase is ready to serve as a robust foundation for a whole universe of DeFi-native stablecoins across many of your favorite EVM-compatible blockchains over the coming months. And it’s all possible because of talented teams raising their hand to bring the best CDP stablecoin codebase to their respective communities.

TL;DR:

• Friendly fork teams are set to deploy V2 across 15+ different networks and ecosystems
• Forking team intend to reward early users of BOLD during its initial bootstrapping
• BOLD holders will be incentivized to provide early liquidity for each friendly fork

Read on below to learn more about this approach to scaling BOLD adoption.

A Refresher on Forkonomics

In June it was announced that the Liquity V2 codebase would be published under a business software license (BUSL). This still means that it is source available and can be viewed by anyone on the Liquity AG GitHub or via an Ethereum block explorer post-deployment. But, if a team wants to deploy their own stablecoin using this code prior to September 2027, they will need to receive a license from Liquity AG. 

This decision was made given the proven popularity of Liquity V1, which was forked over 35 times. It’s a process that self-selects for winning teams who can deliver real value both to their ecosystems and Liquity users.

All signs now point to this having been the correct call, with fork deployments announced for Arbitrum, Berachain, Hyperliquid, and Scroll, and more on track for the following networks and ecosystems:

• Ampleforth
• Base
• Binance Smart Chain
• Blast
• Celestia
• Celo
• Liquity
• Eigenlayer
• Fraxchain
• Gnosis
• IOTA EVM
• Mantle
• Monad
• Optimism
• Sonic

The introduction of a more restrictive process has had an outsized impact, attracting experienced and reputable DeFi builders interested in revitalizing DeFi landscapes. Moreover, these native builders have existing business development relationships with which to scale these stablecoins, something that could not be replicated by the cross-chain minting of BOLD alone. 

With “forkonomics”, Liquity has preserved its Ethereum alignment while setting other ecosystems up for success in a way that a top-down approach would have struggled to achieve.

A Win-Win Model

What has driven demand for the V2 codebase? With the explosion of blockspace in recent years across alternative layer one blockchains, as well as roll ups on top of existing incumbents, there’s never been a greater fragmentation of liquidity across DeFi. Every new ecosystem is competing for stablecoin liquidity, especially when it comes to borrowing capacity for its native assets. This drives up the overall cost of capital (i.e., higher yields for USDC deposits demanded) especially for DeFi platforms within smaller ecosystems.

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Decentralized Collateralized Debt Position (CDP) stablecoins like those built on Liquity V2 present a compelling solution to this issue. By monetizing ecosystem assets as technical collateral for synthetic dollars, they can supply credit to DeFi markets that would otherwise be starved of it. Put another way, every additional unit of such a native stablecoin people are willing to hold, is one unit of USDC that doesn’t have to be paid for. And while the concept of a decentralized CDP stablecoin is by no means new, Liquity V2 brings with it the most compelling off-the-shelf solution the market has seen to date. 

• User-set interest rates ensure proper pricing regardless of market regime
• Rate-based redemptions help to preserve pegs, assuming collateral integrity

One further emergent benefit of DeFi converging around a single codebase is the efficiency offered by standardization. Each friendly fork has been able to tap into an existing network of service providers for marginal cost, while any modifications (e.g. oracle provider adapters) can be shared. 

Bootstrapping V2

The proliferation of the Liquity V2 codebase across DeFi is set to revitalize on-chain economies by kickstarting credit creation in target ecosystems. With each friendly fork deployment committed to providing liquidity incentives, new opportunities for BOLD holders to interact with different networks emerge. For BOLD holders, this means gaining access to innovative DeFi protocols across different chains, where they can take advantage of both attractive yield and exciting token farming opportunities.

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This creates a virtuous cycle in which:

1. Increased marginal demand from friendly forks drives up BOLD supply 
2. More BOLD supply results in greater protocol interest revenues for distribution
3. Boosting both Stability Pool and PIL yields further drives native demand for BOLD
4. More BOLD is available for friendly forks to tap into for deep secondary liquidity

While BOLD and all of its friendly forks are separate systems without fungibility between stablecoins, a little bit of alignment goes a long way. By collaborating on liquidity and incentivizing growth, BOLD becomes the backbone of a multi-chain stablecoin ecosystem. This approach creates a sustainable and scalable framework, where BOLD unlocks credit and liquidity across multiple networks, driving value for both friendly forks and Mainnet users.
You can read more about this here.