BOLD: Liquity V2's Interest-Rate-Flexible Stablecoin

2026-07-08

BOLD is the stablecoin issued by Liquity V2, the upgraded version of the Liquity borrowing protocol on Ethereum. Unlike Liquity V1's fixed 0.5% interest model, V2 lets borrowers choose their own interest rate. Lower rates are cheaper for the borrower but create higher redemption priority: arbitrageurs will preferentially redeem BOLD from low-rate troves first when BOLD trades below peg. Borrowers must therefore weigh rate cost against redemption exposure, creating a natural market for interest rates that keeps the peg tight.

BOLD maintains its USD peg through a hard floor mechanism: BOLD can always be redeemed for $1 worth of ETH from the lowest-rate troves. If BOLD drops below $1, arbitrageurs buy cheap BOLD and redeem it for profit, shrinking supply and pushing the price back up. The ceiling is softer: it depends on the economics of opening new troves being attractive: but the hard floor is a reliable mechanical anchor. Collateral includes ETH, wstETH, and rETH, with a minimum 110% collateral ratio.

The peg tracking adapter reads the BOLD ERC-20 totalSupply() on Ethereum. Individual trove states are not needed: the aggregate circulating supply is sufficient. The stability pool BOLD balance is monitored separately to track supply locked in redemption support versus free-floating supply. Liquity V2 launched with about $108.7 million in TVL, and BOLD's supply reflects the borrowing demand from that collateral base. Adding BOLD to DefiLlama's stablecoin tracker gave the DeFi community accurate visibility into Liquity's upgraded supply in real time.

Website: liquity.org · Twitter: @LiquityProtocol