BOLD is already a standout stablecoin and one we believe will become DeFi’s Treasury asset. As a fully decentralized, USD-pegged stablecoin issued by Liquity V2, BOLD’s strength comes down to the following:

• Overcollateralized and backed only by decentralized crypto assets: WETH, wstETH, and rETH —no reliance on real-world assets or centralized custody.
• Always directly redeemable to its underlying collateral (ETH and LSTs), ensuring fast and liquid swaps at a $1 value.
• Immutable design, eliminating protocol upgrades and reducing attack vectors.
• Native incentives through Protocol Incentivized Liquidity (PIL), guaranteeing robust liquidity for transactions.  

This makes BOLD the perfect ‘savings account’ to park treasury assets, and diversify stablecoin holdings.

sBOLD, built by K3 Capital, takes this a step further by automating and compounding rewards within the Stability Pool. As a yield-bearing version of BOLD, sBOLD not only enhances returns but also opens doors to additional DeFi opportunities—all while maintaining the reliability and composability that make BOLD exceptional. 

sBOLD also marks the first instance of a third-party project building on top of Liquity V2.

How does sBOLD work? 

sBOLD is a yield-bearing token that streamlines deposits into Liquity V2 Stability Pools. When you deposit BOLD into the sBOLD vault, your funds are allocated in fixed proportions: 70% to the wstETH Stability Pool, 20% to the rETH Stability Pool, and 10% to the WETH Pool* (to be finalized).In return, you receive an ERC4626 receipt token, which can be used all across DeFi. Whether you want to use it as collateral in money markets or yield-splitting protocols, sBOLD simplifies the Stability Pool experience into a modular asset.

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The key benefits are twofold:

1. Interest Across All Pools:

sBOLD captures a pro-rata share of interest from all the Stability Pools present in Liquity V2. Holding 1 sBOLD means you’re earning a portion of interest from the wstETH, rETH, and wETH stability pools in the same fixed split  70% wstETH, 20% rETH, and 10% WETH.

2. Liquidation Gains:

 sBOLD holders benefit from liquidation gains without the hassle of managing collateral. Similar to Liquity V1, liquidations in V2 are triggered when a Trove’s LTV falls below the LTV threshold of their respective borrow market. In a liquidation event, BOLD from the Stability Pool of that particular borrow market is used to cover the Trove’s debt. In return, the pool receives the Trove’s collateral at a ~5% discount to the market price.

Typically, depositors would need to sell the liquidated collateral (ETH / LST) to realize them. sBOLD automates this process, using solvers to quickly withdraw and convert the collateral back into BOLD. This automation not only removes exposure to ETH price fluctuations, but also enables smoother integration with third-party DeFi protocols by removing the non-stable component of the tokenized derivative.
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What are some of these DeFi use-cases that sBOLD facilitates?

• A Yield-Bearing Stablecoin: sBOLD is a yield-bearing version of BOLD, allowing you to passively earn compounding rewards. It’s a hands-off way to grow your BOLD holdings.
• Flexible Collateral: Beyond the passive yield it provides, sBOLD can be used as collateral across DeFi platforms, opening doors to recursive borrowing against non yield bearing assets on money markets, restaking designs, and yield trading. This makes it the ideal stablecoin for optimizing various DeFi strategies.
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What are some of the risks associated with the sBOLD?

sBOLD represents the first DeFi primitive developed on top of Liquity V2. Built by K3 Capital, the sBOLD vault introduces certain mutable elements compared to Liquity V2's immutable structure:

• Oracles: sBOLD will utilize a Pyth oracle upon launch. 
• Swap parameters: Initially, the swap adapter to convert liquidation gains back into BOLD will use the 1inch v6 router. However, this swap adapter can be changed.
• Fee switch: Initially set to 0, this can be turned on at K3's discretion. However, K3 does not plan to implement this in the first 6-12 months.
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Are there any other risks?
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Contracts for sBOLD are paused during liquidations to avoid front-running. Otherwise, the minting and redeeming process is available at all times.

To learn more about the technicals around how sBOLD works, check out the Gitbook of K3 here: https://k3-capital.gitbook.io/sbold
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When will it go live?

sBOLD will be available in Q1 2025. sBOLD transforms BOLD into a decentralized, yet yield-bearing asset that fits perfectly into any DeFi strategy. Whether you’re earning passively, using it as collateral, or exploring DeFi opportunities, sBOLD elevates BOLD’s utility even further. 

Who are K3 Capital?

‍K3 is one of the largest and longest standing institutional on-chain liquidity providers. Rather than taking a passive approach, the company actively contributes to DeFi by applying its expertise in risk management and deep understanding of industry's underlying economics and interconnections. This enables K3 Capital to develop public tools and curate new market primitives, opening up its professional toolbox to all DeFi users.
‍(Source: K3 Capital)

Where can I learn more?

Join K3’s official telegram group for more questions here: @sBOLDofficial

To learn more about K3's technical design implementation, check out K3's Gitbook

To learn more about K3 Capital, head to their X here: K3 Capital