Liquity is a decentralized borrowing protocol built on Ethereum that enables users to borrow the BOLD stablecoin against ETH and liquid staking tokens — with full user control over interest rates, no governance surprises, and a resilient liquidation mechanism powered by community-driven stability pools.
Liquity was founded on a simple belief: everyone should be able to access decentralized credit without relying on opaque governance, oracle manipulation, or centralized intermediaries. Our mission is to provide the most capital-efficient, transparent, and resilient borrowing infrastructure for decentralized finance on Ethereum.
We believe in a future where borrowers set their own interest rates based on real market signals, where liquidations are handled fairly and automatically, and where the protocol itself cannot be altered by a small group of insiders. Liquity V2 is the materialization of that vision.
Liquity V2 introduces a suite of innovations that make decentralized borrowing more efficient and user-friendly than ever. Unlike previous generations of DeFi lending protocols, Liquity gives borrowers full autonomy over their positions while ensuring the system remains solvent and secure.
The Liquity ecosystem is powered by two tokens: BOLD, the protocol's native stablecoin, and LQTY, the governance and incentive token inherited from Liquity V1.
Both tokens operate within a carefully designed incentive structure that rewards liquidity provision, responsible borrowing, and long-term protocol participation.
At its core, Liquity allows users to lock ETH or liquid staking tokens as collateral and mint BOLD stablecoins against that collateral. The process is straightforward:
Liquity is more than a protocol — it is a thriving ecosystem of builders, integrators, and users who share a commitment to open, permissionless finance. The Friendly Fork Program enables third-party teams to deploy their own branded instances of the Liquity codebase, expanding access to BOLD-powered borrowing across the DeFi landscape.
External partners and integrations extend the utility of BOLD beyond the core app, including structured vaults, LP positions on major DEXs, and yield-bearing wrappers such as sBOLD and yBOLD.
Liquity places security at the center of everything we build. The V2 smart contracts have undergone extensive audits by multiple independent security firms, and the core protocol is immutable — no admin key can pause, upgrade, or drain the system after deployment.
Our liquidation engine is designed with redundancy: stability pools serve as the primary mechanism, with backup redistribution to existing troves ensuring the system remains solvent even during extreme market conditions. The protocol also employs a decentralized oracle infrastructure to prevent price manipulation attacks.
Liquity V2 represents a major step forward from the original protocol, introducing user-controlled interest rates, multi-collateral support, and a revamped governance model for LQTY. But our work does not stop here.
Looking ahead, the Liquity ecosystem aims to expand collateral options to include additional liquid staking derivatives, deepen integrations with the broader DeFi ecosystem, and grow the Friendly Fork Program to bring BOLD-powered borrowing to users across multiple platforms and chains. Community governance through LQTY staking will play an increasingly important role in shaping the protocol's direction.
We are committed to building the most resilient, transparent, and user-centric borrowing protocol in DeFi — for the long term.