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Liquity V2 Official: BOLD Stablecoin & User-Set Rates Guide 2026 

Liquity Ecosystem: V1 (LUSD) vs. V2 (BOLD)

The Liquity ecosystem now supports two distinct protocol versions, each catering to different borrower needs.

Liquity V1 (LUSD): The legacy protocol that issues LUSD Stablecoin. It is famous for its 0% interest loans (one-time fee only) and strictly accepts ETH as collateral.

Liquity V2 (BOLD): The 2026 standard that issues BOLD Stablecoin. It introduces User-Set Interest Rates, allowing borrowers to lower their rates to avoid redemptions. It accepts multiple collateral types, including WETH, wstETH (Lido), and rETH (Rocket Pool).

Friendly Forks: The V2 codebase is licensed to "Friendly Forks" on other chains, creating a network of aligned protocols that all contribute revenue back to LQTY Staking Rewards.

User-Set Interest Rates & Trove Architecture

Liquity V2 revolutionizes borrowing by replacing algorithmic rates with a free market.

User-Set Rates: Unlike Aave or Compound where the DAO sets the rate, on Liquity V2, you set your own interest rate. A higher rate protects you from redemptions, while a lower rate saves money but increases risk.

Liquity Trove: Your loan position is called a "Trove." It is an individual CDP (Collateralized Debt Position) that maintains its own collateral ratio.

Redemption Mechanism: To maintain the peg, BOLD Stablecoin can be redeemed 1:1 for the underlying ETH collateral. Redemptions always target the Troves with the lowest interest rates first, creating a self-balancing "Proof of Rate" consensus.

LQTY Staking & Stability Pool Yield

The Liquity economy is designed to distribute 100% of protocol revenue to users.

Liquity Stability Pool: Users deposit BOLD (or LUSD) into the Stability Pool to act as the "insurer of last resort." In exchange, they earn liquidation gains (cheap ETH) and LQTY Staking Rewards.

Real Yield: Staking LQTY allows you to earn a share of the issuance fees (from new loans) and redemption fees. In V2, this is paid in BOLD Stablecoin and ETH, providing non-inflationary "Real Yield."

Incentive Direction: V2 introduces a "Gauge" system where LQTY stakers can direct protocol liquidity incentives to specific pools (e.g., Curve BOLD/USDC), effectively controlling the liquidity strategy of the stablecoin.

Liquity Frontend: Official Minting Guide

Because Liquity is immutable, it has no official website frontend. You must use a third-party operator. Follow this path:

Select Interface: Navigate to the verified Liquity Frontend List (e.g., Liquity.app or specialized V2 frontends).

Connect Wallet: Link your Ethereum wallet.

Choose Version: Select Liquity V2 to mint BOLD.

Open Trove: Deposit collateral (e.g., wstETH).

Set Rate: Use the slider to set your interest rate. Tip: Check the "Redemption Risk" indicator to ensure your rate is competitive.

Mint: Confirm the transaction to mint BOLD Stablecoin to your wallet.

Is Liquity Safe? Immutable & Governance-Free

Liquity is widely regarded as the safest protocol in DeFi due to its "Stone" philosophy.

Immutability: The core contracts for V1 and V2 are immutable. No developer or DAO can change the code, freeze funds, or alter loan terms after deployment.

No Admin Keys: There is no "Pause" button. The protocol runs autonomously on Ethereum.

110% MCR: The ETH Collateral Loan engine requires a Minimum Collateral Ratio (MCR) of only 110%, making it highly capital efficient while maintaining solvency through instant liquidations.

Frequently Asked Questions

What is the difference between LUSD and BOLD? LUSD is the V1 stablecoin (0% interest, ETH only). BOLD is the V2 stablecoin (User-set interest, LST collateral, better peg stability).

Can I be liquidated? Yes. If your Trove's collateral ratio falls below 110%, your collateral is liquidated to the Liquity Stability Pool.

Why do I need to pick a frontend? To ensure censorship resistance, the Liquity team does not run a web interface. Independent operators run frontends and earn a "Kickback Rate" from the rewards generated by their users.

[> Official Liquity Frontend List: Mint BOLD & Stake LQTY <]

https://sites.google.com/verify-chain.org/liquity