General

What is Liquity v2?

Liquity v2 is a decentralized borrowing protocol that lets users deposit ETH or LSTs as collateral, and mint the stablecoin BOLD.

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

What are the differences to V1?

While there are plenty of changes coming with V2, it will keep the things V1 is known for:

• Immutability

• Decentralization

• Rigorous security

• No TradFi exposure

However, V2 is innovating on multiple fronts:

• User-set interest rates - more control over your borrowing cost and leverage

• New collateral types - ETH and LSTs

• Improved redemption mechanism

• Protocol-incentivized liquidity (PIL)

• More attractive short-term loans

• Improved capital efficiency

• Multiple Troves per address (and transferable)

• No Recovery Mode

• Looping/one-click leverage

What happens to Liquity v1 and LUSD?

Both protocols will exist in parallel. We don’t intend to encourage migration from V1 to V2, and will continue to support the growth of both protocols & stablecoins.

Does Liquity V2 have governance?

Liquity V2 is subject to minimal governance which is solely tasked with distributing Protocol Liquidity Incentives (PIL), directing 25% of the protocol's revenue to external initiatives.

Governance has no other functions or powers, as Liquity V2’s smart contracts are immutable and not upgradeable.