Liquity USD(LUSD)

Liquity V2 is a decentralized borrowing and stablecoin protocol built on Ethereum that allows users to borrow the USD-pegged stablecoin BOLD by collateralizing ETH and liquid staking tokens (LSTs) such as wstETH and rETH. It builds on the original Liquity V1 protocol by introducing user-set interest rates, enabling borrowers to fix or adjust their borrowing costs dynamically. This feature enhances capital efficiency and predictability for users, while also providing a sustainable revenue source for BOLD holders. Liquity V2 is fully on-chain and immutable, ensuring no governance or admin interference, which increases trust and stability.

The protocol supports borrowing up to 91% loan-to-value (LTV) against ETH and LST collateral, with a new redemption mechanism that is decoupled from LTV and features lower liquidation penalties. Users retain full control over their collateral and stablecoins, with no freezing or protocol upgrades that could affect their positions. Liquity V2 does not operate its own frontend; instead, it relies on a community of independent frontend operators, giving users choice and decentralization in access.

BOLD, the stablecoin issued by Liquity V2, is over-collateralized exclusively by crypto assets and designed for resilience and fast redeemability. Users can borrow BOLD, multiply their exposure to ETH through automated looping, earn yield by depositing BOLD into stability pools or external liquidity venues, and stake LQTY tokens to direct liquidity incentives and earn rewards. The protocol also supports a growing ecosystem of forks that license its codebase and offer additional integrations. Developers and product teams can get started by choosing a frontend, connecting their wallets, and interacting with the protocol via comprehensive documentation and community support channels.