The Liquity Protocol team is investigating a potential issue affecting its V2 Stability Pools
The Liquity Protocol team is investigating a potential issue affecting its V2 Stability Pools, known as 'Earn.' While the protocol is functioning normally and no users have been impacted so far, the team has advised users to close their Stability Pool positions as a precaution.
Additionally, they recommend refraining from making new deposits into the Stability Pool and suggest withdrawing existing deposits until the investigation is complete. This advisory comes amid concerns about a potential risk associated with the Stability Pools.
This is an AI-generated article powered by DeepNewz, curated by The Defiant. For more information, including article sources, visit DeepNewz.
Decentralized lending protocol Liquity has seen over $17 million in withdrawals after urging users to exit its v2 stability pools due to an ongoing investigation into a potential threat.
According to DefiLlama, an upward of $17 million has left the platform in the past 24 hours. Liquity’s total value locked has dropped, falling from its all-time high of $84.9 million on Feb. 11 to $67.84 million. The outflows primarily impacted the protocol’s stability pools containing wstETH, WETH, and rETH. Liquity v1 has remained unaffected, showing no signs of similar withdrawals.
On Feb. 12, Liquity v2 issued an urgent warning to users, advising them to withdraw funds from its stability pools. Shortly after Liquity’s announcement, Ethereum staking giant Lido also issued a notice advising wstETH holders to remove their assets from Liquity v2’s Stability Pool. Neither Liquity nor Lido disclosed specific details about the underlying threat. The immediate market reaction to these notices led to the ongoing withdrawals.
⚠️ Notice to wstETH Users:
It is recommended to promptly withdraw tokens from Liquity V2 Stability Pool (“Earn”) as a potential issue is being investigated by their team.
For updates, refer to official Liquity channels. https://t.co/2ag6TcwK1q
— Lido (@LidoFinance) February 12, 2025 Liquity’s team has since informed users that the protocol is working as usual and that all funds are safe. They assured investors that key features like withdrawing collateral, redeeming stablecoins, and staking LQTY, were still running smoothly. They also confirmed that BOLD, Liquity’s stablecoin, remained fully backed.
Liquity v2 was launched on Jan. 23 with several new features aimed at improving borrowing and lending. The update made it possible for users to use several assets as collateral. These include stETH, rETH, and WETH. It also introduced a flexible interest rate system where borrowers could set rates between 0.5% and 1,000%. The stability pool was designed to reward users with interest and liquidation profits.
Now that Liquity v2 is under investigation, the platform is facing a major test of user trust. While withdrawals have slowed, the ongoing uncertainty could affect the protocol’s growth. It’s still unclear if the issue has been completely resolved or whether it will lead to more instability. Liquity’s token price was only mildly affected and remains stable for now.
The platform has advised users to exit their Earn positions on Liquity V2.
According to DeFiLlama data, Liquity Protocol, an Ethereum-based lending platform, has suffered outflows worth approximately $30 million over the past two days.
In a Feb. 12 X post, Liquity Protocol informed users that it was investigating a potential issue regarding its Liquity V2 Stability Pools. To be on the safe side, the protocol advised users to close their Earn positions.
Liquity Protocol released a follow-up X post on Feb. 13, stating that the issue with the stability pool had been confirmed. However, they did not provide more information regarding what could have caused the issue.
“Yesterday’s issue with the Stability Pools (“Earn”) on Liquity V2 has been confirmed. Users are strongly advised to close their Stability Pool (“Earn”) positions in Liquity V2. To the team’s knowledge, no users have been impacted, and the issue is isolated to the Stability Pool (“Earn”),” Liquity Protocol said.
Liquity said that V2 will be redeployed with a patch, and an update will be sent to its official channels next week.
Liquity V2 launched less than a month ago on Jan. 23. Its LUSD stablecoin has a market capitalization of $57 million, according to CoinGecko.
Chainlink, the leading provider of onchain data and interoperability solutions, welcomed three new projects—Zeus Network, Liquity, and SHIFT RWA—to its ecosystem. These integrations highlight the rising demand for secure, decentralized infrastructure as cross-chain and tokenized asset markets grow.
Zeus Network Brings Bitcoin to Solana Zeus Network, a Bitcoin layer built on Solana, has integrated Chainlink’s Cross-Chain Interoperability Protocol (CCIP) and Proof of Reserve to expand the reach of zBTC, its permissionless Bitcoin-backed asset. This move aims to connect Bitcoin with multiple chains, including Ethereum, Base, and Sonic, while using Chainlink’s infrastructure to ensure zBTC remains fully collateralized.
Through its dApp, APOLLO, Zeus allows users to lock native BTC and mint zBTC on Solana. Unlike centralized wrapped BTC options, zBTC is entirely decentralized. Its reserves are transparently verifiable through ZeusScan, backed by Chainlink's Proof of Reserve—a key step toward full transparency and security in cross-chain asset flows.
By leveraging CCIP, Zeus is looking to make zBTC more mobile across chains. Their long-term ambition is bold: onboard 1% of all Bitcoin onto the Solana ecosystem. The use of Chainlink's infrastructure helps ensure zBTC can move between blockchains while remaining fully backed and independently verifiable.
“Zeus Network’s integration of Chainlink CCIP and Proof of Reserve demonstrates a strong commitment to secure, decentralized cross-chain BTCFi,” said Luke Lim, Head of CCIP Go-To-Market at Chainlink Labs.
Image: Zeus NetworkLiquity V2 Turns to Chainlink CCIP Liquity V2, the Ethereum-native borrowing protocol, has also adopted Chainlink’s CCIP—but with a different mission. It’s rolling out BOLD, a new ETH-backed stablecoin that can operate natively across chains. This is made possible by Chainlink’s Cross-Chain Token (CCT) standard, which allows any token to become interoperable across EVM-compatible networks.
By integrating CCT, BOLD can now bridge across Arbitrum, Base, Ethereum, and Optimism, streamlining access to liquidity and simplifying cross-chain operations. Users no longer need to rely on wrapped assets or third-party bridges. This also enables Liquity to unify the many forks of its protocol scattered across different blockchains.
Security remains central to the Liquity-Chainlink collaboration. Per reports, Liquity selected CCIP after evaluating various solutions due to its strong security track record.
CCIP uses the Chainlink Decentralized Oracle Network (DON), which has secured over $75 billion in DeFi total value locked (TVL) and powered $18 trillion in onchain value transfers since 2022.
It also features the Risk Management Network—a separate verification layer that monitors CCIP activity in real time. This defense-in-depth architecture makes CCIP one of the most secure interoperability protocols on the market, a vital consideration after numerous cross-chain bridge exploits in recent years.
By using CCIP, Liquity V2 ensures BOLD can travel across chains securely, with programmable token transfers that allow smart contracts to take immediate action on the destination chain.
Image: LiquitySHIFT RWA Joins Chainlink BUILD SHIFT RWA, a project focused on bringing real-world assets onchain, has joined Chainlink’s BUILD Program. This will give SHIFT enhanced access to Chainlink’s oracle services, technical support, and ecosystem-wide collaboration—all in exchange for a share of its native token supply distributed to Chainlink service providers and stakers.
SHIFT is building Asset-Referenced Tokens (ARTokens)—MiCAR-compliant digital assets backed by stocks, bonds, and ETFs. These tokens aim to offer 24/7, cost-effective, and transparent access to real-world assets via DeFi platforms. TradFi institutions can use ARTokens to tap into DeFi liquidity without leaving regulatory frameworks behind.
To increase user trust, SHIFT will integrate Chainlink’s Proof of Reserve for its tokenized assets. This ensures that each ARToken is fully backed by corresponding offchain assets and that this backing can be verified onchain at all times. The result is higher transparency and more confidence for both institutions and individual users.
SHIFT’s broader mission is to enable compliant and secure crossovers between Wall Street and decentralized finance.
Image: Shift RWAWhy This Matters for the Future of Web3Chainlink's newest integrations reflect a growing trend: projects are no longer willing to compromise on security or decentralization in the name of convenience. Whether it’s cross-chain Bitcoin (Zeus), stablecoins that work natively across multiple chains (Liquity), or real-world asset tokenization (SHIFT), the need for reliable infrastructure is clear.
Each of these projects uses Chainlink differently:
Zeus brings secure, verifiable Bitcoin to Solana.Liquity turns its stablecoin into a native cross-chain asset.SHIFT ensures real-world assets are always transparently backed.As more ecosystems embrace Chainlink standards, crypto’s fragmented infrastructure begins to unify. That benefits users, builders, and institutions alike—reducing risk, boosting efficiency, and enabling new financial applications across chains and asset types.
Liquity V2 is live with its new $BOLD stablecoin, NFT-based Troves, and a “forkonomics” program spawning friendly spinoffs.
5
Subscribe to Bankless or sign in
Liquity, the decentralized borrowing protocol, launched its V2 platform on Ethereum this month. The V2 offers new borrowing and earning opportunities and could mark the start of a new era of "friendly forks" in DeFi.
Let's catch you up with a quickstart primer...
What's New?via LiquityWith its minimized governance and its ETH-only collateral policy, Liquity V1 and its $LUSD stablecoin were bastions of decentralization in DeFi.
The goal with the V2 system, then, is to expand upon this solid foundation toward more flexible and more profitable ends.
For starters, V2 supports ETH and popular liquid staking tokens like rETH and wstETH, while its new $BOLD stablecoin—which is always redeemable for $1 of collateral—is the keystone of the protocol's flywheel design.
Here, the wheel starts when users deposit ETH or LSTs as collateral and borrow $BOLD. Unlike V1’s one-time fee, borrowers in V2 set their own ongoing interest rates. Lower rates = higher risk, while higher rates reduce redemption risk.
The ensuing interest payments from borrowers are continuously collected in $BOLD. At this point:
75% of the interest revenue goes to depositors in the Stability Pools, who supply $BOLD to absorb liquidations. Note, depositors also earn from the distribution of collateral seized from these liquidations. 25% of the interest revenue is allocated to liquidity providers on external decentralized exchanges, e.g. Uniswap or Curve, as Protocol Incentivized Liquidity (PIL) for fostering $BOLD liquidity across DeFi.Going back to the Stability Pools, liquidations remove "cheap" debt, forcing up interest rates and increasing yield for Stability Pool depositors. This dynamic boosts demand for $BOLD as access to this yield, which in turn helps stabilize the stablecoin's $1 USD peg.
All that said, the $BOLD idea is to create a positive feedback loop:
Borrowers pay interest → Interest rewards depositors and LPs → More demand for BOLD → Peg stability and liquidity → Attracts more borrowers and depositors, etc. Also, as an NFT aficionado myself, it's worth mentioning that another major change in Liquity V2 is the protocol now represents its borrow positions, a.k.a. Troves, as ERC-721 NFTs similar to how Uniswap V3 LP NFTs work.
Enjoying this article?
Subscribe to Bankless or sign in
This design wrinkle has paved the way for 1) easy management of multiple Troves within a single wallet, and 2) secondary markets for Liquity's borrow positions on NFT marketplaces, e.g. OpenSea.
What About Friendly Forks?via LiquityLiquity published its V2 codebase under a Business Source License (BUSL).
Anyone can read the contracts, but to deploy a commercial copy before September 2027 you need a license from the Liquity AG team.
Mind you, Liquity V1 was forked over 30 times. But with V2 the builders have leaned in and created a collaborative “Friendly Fork” program.
Accordingly, +15 teams have already signed up to release their own V2-based stablecoins, e.g. Nerite's $USDN on Arbitrum, Felix's $feUSD on HyperLiquid, Beraborrow's $NECT on Berachain, etc.
Liquity calls this model “forkonomics.” Instead of dozens of unaffiliated clones fighting for scraps, the network effect flows both ways:
New apps can tap a next-gen stablecoin design and monetize their chain's native assets without begging USDC to bridge in. $BOLD users can enjoy airdrop-like opportunities for fresh deployments—early yield on Stability Pools plus extra LP rewards when you seed liquidity against the new fork's dollar. As for Liquity itself, this fork system facilitates $BOLD demand and a web of integrations without Liquity proper having to stretch beyond Ethereum. If the experiment works, expect future DeFi heavyweights to adapt this “licensed but aligned” playbook for their own projects.
How to Get Startedvia LiquityRight now, there are three main ways you can interact with Liquity V2: borrowing $BOLD, depositing to the Stability Pools, or staking $LQTY.
Borrowing is a means to acquire $BOLD for depositing into the Stability Pools, while staking $LQTY allows you to 1) earn revenues from the ongoing Liquity V1 protocol, and 2) vote on which external liquidity pools receive the V2 PIL incentives.
However, Liquity doesn't maintain its own V2 frontend for the sake of decentralization, so to dive in you'll have to pick from one of the independent community-run options.
via LiquityI recently wrote about DeFi Saver, and I'm a huge fan of that platform, so I can personally recommend it for Liquity V2 users. It offers the basics, like the ability to create Trove borrow positions and deposit to the Stability Pools, plus more advanced functionalities like automated leverage management, stop losses, simulated positions, and beyond.
You can also stake $LQTY on DeFi Saver (just flick over "Stake" tab in the platform's Liquity V2 hub) to earn V1 fees, but if you want to also vote on V2 PIL incentives, consider using other frontends like liquity.app that offer voting dashboards for stakers.
In April 2025, Liquity hit a new all-time low at just $0.43. But over the past few months, it’s bounced back — and by the beginning of July it’s trading at $1.
So what’s next for the token? We break it all down in this Liquity (LQTY) price prediction.
What is Liquity? Liquity is a decentralized borrowing protocol that lets users take out interest-free loans using Ethereum (ETH) as collateral — without relying on centralized intermediaries. Instead of traditional stablecoins, Liquity issues its own: LUSD, a fully decentralized, crypto-backed stablecoin. The platform runs on a unique model where users lock up ETH and receive LUSD in return, all while paying zero interest.
Its native token, LQTY, plays a key utility role in the system — holders earn a cut of protocol fees and rewards for helping keep the system stable. What really sets Liquity apart is how hands-off it is: no governance, no dev intervention after launch. It’s one of the purest forms of DeFi out there — simple, efficient, and truly decentralized.
What’s on the horizon for the LQTY token? Is Liquity a good investment? Let’s take a closer look at the Liquity crypto price prediction.
Liquity coin price prediction: general outlook As of July 07, LQTY is trading around $1.00 — a big jump from its April low of just $0.43.
Over the last 24 hours, the price has moved by 0.01%, with a change of 0% in the past hour. For longer-term performance, the price has varied by -0.15% over the last 7 days and by 0.04% in the past month.
Liquity 1-D chart | crypto.news So, what’s fueling the comeback? A few things: trading volume has picked up fast (hitting $25-31M daily), the charts are looking bullish (RSI and MACD both flashing green), and the buzz around Liquity V2 and its overcollateralized BOLD launch has definitely helped.
Plus, the protocol itself is seeing more action — TVL is holding steady near $350M, users are opening more Troves, and LQTY staking is up, meaning fewer tokens are hitting the market. It’s still far from its all-time high of nearly $63, but momentum is clearly back on its side.
Let’s turn our attention to the Liquity price prediction for 2025.
According to CoinCodex’s LQTY price prediction, the token is expected to see a modest bump of about 2.75%, possibly hitting $1.62 by July 26. The site forecasts that LQTY could trade between $1.576 and $2.10 through the rest of the year.
As of June 27, the overall sentiment for the Liquity price forecast is still leaning bullish, with 29 technical indicators showing positive signals and only 3 flashing bearish.
DigitalCoinPrice paints an even more optimistic picture, predicting that LQTY’s price could range between $3.08 and $3.54 later in 2025.
Wallet Investor is the most upbeat of all — its forecast suggests the coin could hit a high of around $6.463 by the end of 2025.
Will Liquity go up or down in five years?
Liquity price prediction 2030 Wallet Investor’s expectations for LQTY by 2030 are the complete opposite of their 2025 outlook — the platform predicts the token could drop to an average price of just $0.12 by late June 2030.
DigitalCoinPrice’s projections for LQTY paint a much brighter picture, estimating it could trade between $7.64 and $8.80 by the end of the decade.
CoinCodex’s Liquity price prediction for 2030 is more conservative, suggesting a range between $2.50 and $2.75.
While there’s a lot of disagreement on where LQTY is headed long-term, none of these forecasts see the token making it back to its all-time high within the next five years.
Should you invest in Liquity? LQTY has shown solid recovery from its lows, and with strong fundamentals and growing user activity, there’s reason for optimism. That said, it’s still a volatile ride, and not everyone agrees on where it’s headed. So as always: do your own research and manage your risk.
Disclosure: This article does not represent investment advice. The content and materials featured on this page are for educational purposes only.
Rocket Pool’s DAO has approved a proposal to launch part of its payments on Liquity Protocol V2’s BOLD, a decentralized overcollateralized stablecoin backed by rETH.
The launch of this new investment service enables Rocket Pool’s DAO members to access loans using Ethereum as collateral.
This service allows the members to access capital without the need to sell their Ethereum holdings, providing friendly loan conditions and entire control via Liquity Protocol V2’s collateralized debt platform.
Why Is This Decentralized Loan Offering Unique? This program by Rocket Pool is crucial as it offers new investment opportunities for its DAO members who hold Ethereum, enabling them to utilize their virtual tokens for liquidity without having to sell their holdings. This initiative is designed to provide an advanced and seamless approach to the DAO members to manage their investments, offering an option to traditional lending techniques that normally come with strict loan requirements and time-consuming approval procedures.
By providing Ethereum-backed loans, Rocket Pool is not just broadening its offerings but also establishing itself as a visionary decentralized staking protocol that understands the growing demand of the modern market. The integration highlights the rising adoption of crypto assets, offering users multiple alternatives to manage their money in the modern era.
Unlocking Credit for DAO Members This action by Rocket Pool is a strategic move to integrate Ethereum more deeply into the DeFi ecosystem. By enabling its DAO members to leverage their Ethereum holdings as collateral for loans, Rocket Pool is offering a solution that resolves the liquidity demand for Ethereum holders without forcing them to sell their tokens.
This method not only helps members maintain their ETH investments but also offers them flexibility to engage in other financial expansion opportunities. This initiative’s flexible conditions make it appealing for users who are burdened by traditional loans because of borrowing restrictions. Lastly, the entire control provided through Liquity Protocol V2 ensures that customers can manage their loans effectively and seamlessly.
AUTHOR
Nicholas Otieno is a fintech writer specializing in cryptocurrency markets. Since 2019, he has written articles to educate readers about cryptocurrency and its substantial positive impact on global prosperity. Nicholas is a Bitcoin holder, believing firmly in its fundamentals. His work has been featured in publications such as Finance Magnates, Blockchain.News, Bitcoin Magazine, Coincub, and among others. When he's not writing, Nicholas enjoys performing domestic tasks, spending time with friends, listening to music, and watching football.
Enosys’ Liquity will enable XRP holders to mint overcollateralized stablecoins on Flare, with mechanisms to ensure the assets maintain values close to $1.
The Web3 software development entity Enosys has introduced a new type of stablecoin loan to the interoperability layer-1 network, Flare. These loans are backed by Ripple’s native cryptocurrency, XRP.
According to a press release sent to CryptoPotato, a Collateralized Debt Position (CDP) protocol will power the loans. It will allow XRP holders to mint overcollateralized stablecoins on Flare.
First XRP-backed Stablecoin Loans on Flare Enosys explained that the XRP holdings will back the stablecoins, ensuring they maintain a value close to $1. Through this approach, XRP holders can access the value of their assets without having to sell them.
The CDP protocol to be deployed on Flare is called Liquity. Enosys claims Liquity is one of the most tried and trusted protocols in the decentralized finance (DeFi) sector. Since its launch in 2021, the network has secured billions of dollars in collateral and kept its stablecoin peg amid extreme market conditions.
One mechanism at the core of Liquity’s success is the protocol’s stability pool. The pool allows users to stake their stablecoins for yield coming from mint fees, liquidation rewards, and interests paid on loans. This mechanism makes sure the protocol can cover outstanding debt in the event of liquidation.
Enosys will release a fork of Liquity V2 on Flare, maintaining the features that made the first version trusted. The only changes made will be upgrades like protocol-incentivized liquidity, capital efficiency, and user-set borrowing rates.
Access to DeFi Yield Opportunities The alliance between Enosys and Flare will affect a select Flare-native tokens for now. They include Flare XRP (FXRP) and Wrapped Flare (wFLR). The companies intend to expand the capabilities to staked XRP (stXRP) soon, allowing Ripple holders to put their assets to work.
You may also like: XRP’s Price Could Explode to $8, But This One Zone Is Holding It Back 5 Reasons Why Bitcoin Just Crashed Below $63K as Liquidations Top $500M XRP’s Biggest Warning Sign Is Still Flashing Despite Easing Whale Activity Users can lock their FXRP on Flare and mint a stablecoin, which can provide liquidity and access to DeFi yield opportunities. While borrowers can set the annual percentage rate (APR) they’re willing to pay, lower rates come with a price. If the stablecoin falls below its $1 peg, loans with the lowest interest rates will be redeemed first.
“This is just the beginning. By bringing a proven model like Liquity V2 to Flare, we’re laying the foundation for stable, decentralized liquidity powered by XRP and enhanced by liquid staking,” the Enosys team stated.
Meanwhile, Enosys Loans will also be utilizing data from the Flare Time Series Oracle (FTSO) to implement decentralized collateral pricing.
According to Flare Network, there’s now a stablecoin backed with XRP running on Enosys Liquity V2. The announcement coincides with a new milestone for the XRP Ledger.
Enosys Brings Liquity V2 to Flare, Unlocking XRP Stablecoin The upgrade results in increased liquidity of XRP on the blockchain and expands its utility in the decentralized finance space. Initially, the stablecoin will be pegged to XRP on Flare (FXRP) with the Wrapped Flare token (wFLR) as collateral.
Holders can then transfer staked XRP (stXRP ) and other tokenized assets to Flare (FAssets). This system operates on the model of a Collateralized Debt Position. Thus, users have the opportunity to lock their digital assets and mint a stablecoin.
The first XRP-backed stablecoin comes to @FlareNetworks with @enosys_global Loans ☀️
→ Launching with FXRP and wFLR, then stXRP and other FAssets
→ Backed by Collateralized Debt Positions (CDPs) mechanism
→ @LiquityProtocol V2 friendly fork + Stability pools + FTSO-powered… pic.twitter.com/ehK8lbGuXl
— Flare ☀️ (@FlareNetworks) September 19, 2025
The design integrates core Liquity features, including decentralized pricing from Flare’s decentralized oracle system, known as the Flare Time Series Oracle (FTSO). The Enosys Liquity V2 is an autonomous borrowing system built on Liquidity Protocol version 2.
Liquity previously used Ethereum as collateral, but Enosys has now reworked its use on Flare with XRP. This approach has already seen adoption, with Everything Blockchain tapping Flare’s XRP DeFi framework for its crypto treasury.
Users can lock their assets in XRP and create stablecoins. This is made possible through Locked Asset Loans, Safety Funds, and Blockchain Price Feeds. Using these methods ensures that the stablecoin remains secure, transparent, and reliable.
Stablecoin Creates Greater Value as XRPL Accounts Surpass 7 Million With the introduction of this model on Flare, Enosys has launched the first on-chain debt protocol that works with XRP as collateral. The stablecoin gives XRP holders an additional use for their token.
Investors can also use their tokens to issue stablecoins instead of selling them for cash. The stablecoins generated from the XRP can be used for multiple purposes, such as payments, lending, trading, or earning interest in DeFi. The XRP Ledger is also emerging as a global settlement layer for stablecoins, strengthening its role in broader financial applications.
Such stablecoins can also be used to purchase NFTs, according to the CEO of Flare, Hugo Philion. Philion further stated that this enables the coin to be utilized in the digital economy.
The process unlocks liquidity while still allowing holders to retain long-term exposure to XRP. Participants will also gain reward Flare tokens (rFLR). This adds an incentive for adoption within the ecosystem.
The stablecoin launch comes at a time of expanding XRP network usage. Data from XRPScan shows that the number of active accounts on XRPL has crossed 7 million. This milestone highlights rising adoption across the ledger.
Enosys announced the upcoming launch of a new product called Enosys Loans, described as the first collateralized debt position protocol to leverage XRP as collateral for minting a stablecoin.
Advertisement
The platform will operate on Flare, a layer-1 blockchain network that integrates smart contracts and decentralized data oracles.
Users can mint stablecoins by depositing FXRP, a wrapped version of XRP designed for use on the Flare network.
The launch reflects a broader trend of payment-focused cryptocurrencies like XRP being adapted for yield-generating DeFi activities.
Disclosure: This article was edited by Estefano Gomez. For more information on how we create and review content, see our Editorial Policy.
Liquity V2's Safety Mode: What You Need to KnowMaintaining system health and resilience is very important for an autonomous system. Liquity V2 has a special feature called "Safety Mode" to support system solvency while maintaining decentralization. Here's a simple breakdown of how it works and what it means for you.
What is Safety Mode?Safety Mode kicks in when the overall health of a specific collateral branch (called the Total Collateral Ratio, or TCR) drops below a certain level known as the Critical Collateral Ratio (CCR). This means that Safety Mode can be triggered for one collateral branch while others remain unaffected. The CCR for the ETH branch is 150%, while the CCRs for rETH and wstETH are both 160%. You can monitor the conditions of each branch at: https://dune.com/liquity/liquity-V2
When Safety Mode is activated for a given branch, the system puts some extra restrictions in place to ensure full over-collateralization of the system. Importantly, borrower actions alone can not bring the system into Safety Mode. It can only be activated by branch interest accumulating, or the collateral price decreasing.
What Happens in Safety Mode?As a borrower, you are still able to:
Add Collateral: You can add more collateral to your Trove to help improve the TCR.Repay Debt: You can repay your debt to bring it down to the minimum level of 2000 BOLD. This helps reduce the overall debt in the system.Adjust your interest rate at least 7 days after your last adjustment. Interest rate adjustments are allowed as long as they are not “premature”, i.e. as long as they don’t incur an upfront fee and increase system debt.
The following operations are conditionally allowed:
1. Opening a Trove: the resulting TCR must be equal or greater than the CCR
2. Closing a Trove: the resulting TCR must be equal or greater than the CCR
3. Jointly adding collateral and minting new BOLD: the resulting TCR must be equal or greater than the TCR
4. Jointly withdrawing collateral and repaying debt: the collateral withdrawn must be matched by debt repayment on a 1:1 basis
The following operations are not allowed:
Adjusting interest rate prematurely: The system disallows a premature rate change, which would incur a fee. This would increase the debt in the system, and therefore immediately decrease the current TCRPurely withdrawing collateral Purely drawing new BOLD debt Although these restrictions do limit the ability to fully close positions, these funds remain in the system and are not lost. Once the TCR rises past the CCR again, the restrictions are lifted. If however the branch health continues to decline and the TCR falls below the branch’s “Shutdown Threshold” (e.g. due to a sharp collateral price collapse), then the branch will exit Safety Mode and actually shut down. In this case, all restrictions are lifted and borrowers may fully and immediately close their positions.
Why These Rules?The rules in Safety Mode have two main goals:
Preventing further issues: When the TCR is at or above the CCR, borrowers’ actions can't make the system's health worse.Improving system health: When the TCR is below the CCR, borrowers’ actions should help improve the system's health.ExamplesExample: Opening a New Trove allowed in Safety Mode
Situation- Collateral: $145m (in ETH)
- Debt: $100m (in BOLD)
- TCR = 145% (CCR in ETH branch = 150%)
Operation
- Alice deposits $7m worth of ETH and borrows $1m BOLD.
- After the action: collateral = $152m, debt = $101m
- TCR = 152 ÷ 101 × 100 ≈ 150.5 % → allowed (≥ 150 %).
Example: Opening a New Trove rejected because system would enter Safety Mode
Operation
- Frank deposits $4m and borrows $4m BOLD.
- After the action: collateral = $164m, debt = $104m
TCR = 164 ÷ 104 × 100 ≈ 157.7 % → rejected (falls below 160 %).
Example: Normal Interest Rates during Safety Mode
Situation
- Collateral: $145m (in ETH)
- Debt: $100m (in BOLD)
- TCR = 145% (CCR in ETH branch = 150%)
Operation
- A user hasn’t adjusted its rates for 30 days. The user can adjust the rate normally but he needs to wait at least 7 days to adjust it again
Example: Premature Interest Rate adjustment in Safety Mode
Situation
- Collateral: $145m (in ETH)
- Debt: $100m (in BOLD)
- TCR = 145% (CCR in ETH branch = 150%)
Operation
- A user that has adjusted its rate two days ago, needs to wait for another 5 days to adjust the rate. During that time he might get hit by redemptions if the rate was set too low.
ConclusionSafety Mode in Liquity V2 is designed to keep the system stable and healthy. By following these rules, you help ensure that the protocol remains strong and resilient. Understanding these guidelines will help you navigate Safety Mode effectively and contribute to the overall stability of the Liquity V2 ecosystem, even if you're a smaller user.
Enosys APS Rewards for Liquity V2 Mainnet Users: What You Need to KnowEnosys, the Liquity V2 friendly fork on Flare Network, is allocating 2.75% of their governance and revenue token, APS supply to Liquity V2 Mainnet users. This results in 412.5 APS in total, roughly ~$850,000 of rewards at current prices.
Users will be able to claim starting Jan 21, 2026.
Apsis (APS) is the Enosys ecosystem’s primary governance and rewards token across their CDP and DEX, and is valued at $32m FDV.
Rewards are split into two equal buckets - retro and ongoing, and are based on the Liquity Leaderboard: https://dune.com/liquity/v2-leaderboard
The goal is to reward existing Mainnet depositors, while also incentivizing continued participation across eligible Liquity Mainnet venues. This is not a one-time airdrop. It is a 40-week program with weekly emissions running through the end of Oct 2026.
Based on the current ~$35m eligible TVL, this airdrop alone adds roughly ~3% APR equivalent on top of existing yields.
A reminder - at least 10 more friendly fork airdrops are expected over 2026
Retro bucket (1.375%, ~$425,000)The retro bucket rewards users already on the current Liquity V2 leaderboard (up to 21 Jan 26).
One-time retro claim: 52.5 APS (~$105k) using the current leaderboard snapshot
Leaderboard: https://dune.com/liquity/v2-leaderboardThe remaining portion of the 1.375% retro is then dripped weekly from 1/28 to the same retro cohort (up to Jan 21, 2026). Ongoing bucket (1.375%, ~$425,000)The ongoing bucket rewards fresh activity going forward. This will be based on a Enosys leaderboard that takes into account Mainnet Liquity activity from Jan 21.
Distribution starts 1/28Distributed weekly for the next 40 weeks using an “ongoing” Dune leaderboard based on fresh activity across eligible Liquity Mainnet venues (Stability Pools, liquidity pools, and other tracked venues).Same leaderboard will be used: https://dune.com/liquity/v2-leaderboardWeekly drip (40 weeks total)Each week, 9 APS is emitted in total:
3.85 APS/week to retroactive users (Liquity V2 leaderboard)5.15 APS/week to the users who are actively providing liquidity starting Jan 21, 2026.Total = 9 APS/week (~$18k/week, ~0.06%) each week for 40 weeks.How to claimRewards are claimable only on the Enosys frontend on Flare Network:
https://loans.enosys.global/incentives
BridgingIf you need to bridge to Flare, you can use Stargate at: https://stargate.finance/
What can you do with APS?APS can be utilized in governance staking (https://gov.enosys.global/) to earn a share of all protocol fees aggregated and distributed by the APY Cloud.
APS can also be utilized as liquidity in multiple of their DEX V3 LPs (https://v3.dex.enosys.global/liquidity) to continue earning competitive incentives and fees.
What can you do at Enosys?You can use Enosys to borrow against FXRP or WFLR, mint the Enosys CDP stablecoin, and provide liquidity for it on their Enosys v3 DEX to earn extra rewards.
A reminder - at least 10 more friendly fork airdrops are expected over 2026. Keep providing liquidity across eligible Liquity Mainnet venues to stay on the leaderboards and keep earning weekly rewards.
If you have specific questions on the airdrop, please refer to Enosys's Discord for more information.
Liquity, a protocol that develops decentralized stablecoins on Ethereum, also known for creating the most reliable decentralized stablecoins, is pleased to announce that BOLD has gained an A- rating from Bluechip. BOLD is the second decentralized stablecoin created by Liquity. The main purpose of Liquity’s BOLD is to give a fully decentralized, crypto-backed stablecoin that removes bank, custodian, and censorship risk.
Bluechip is known as an independent stablecoin rating agency. The evaluation results put BOLD ahead of USDC (B+) and DAI (B+) with the perfect scores of 1.0 in Management, Decentralization, and Governance, and on par with PayPal’s PYUSD. BOLD is the only decentralized stablecoin that fully depends on Ethereum-native assets instead of banks, custodians, or off-chain reserves.
It is the only decentralized stablecoin that provides an alternative risk profile for institutions seeking diversification, purification in process, and on-chain stability. BOLD is over collateralized by more than 200%, utilizing $ETH and lending liquid staking tokens, which are wstETH and rETH. In addition, BOLD is providing a transparent and direct redemption mechanism. Liquity has released this news through its official social media X account.
A Credibly Neutral Stablecoin Built for Institutions Michael Svoboda, Founder of Liquity Protocol, expressed his thoughts. He said, “This rating reinforces a simple idea: stablecoins should be predictable systems, not discretionary products. BOLD is designed so users don’t need to trust issuers, banks, or governance committees, only the code. Receiving an A- rating with perfect scores for decentralization and governance validates that a credibly neutral, crypto-native stablecoin can meet institutional-grade risk standards without relying on centralized intermediaries.”
BOLD users have an advantage in that they can withdraw at any time without the need to get permission from any other authorities. Liquity V2 routes 100% of protocol revenues along with immutable smart contracts, and the absence of monitoring eliminates the risk of being locked or stopped at any time during the transfer process.
Liquity’s BOLD Sets a New Benchmark for Crypto-Native Stablecoins BOLD of is basically built for those users who want to get rid of any interruption during the whole process of transactions. The immutable and governance-free system eliminates ambiguity from users’ minds about minting and redemption with full on-chain data transparency. This is the best design for Decentralized Finance (DeFi) treasuries, funds, and power users seeking to expand stablecoin exposure at wider range.
Liquity Protocol ensures the certified record to BOLD’s design. In addition, the team has a successful previous record of LUSD, one of the longest-running decentralized stablecoins, which touched $5 billion in peak total value along with four successful years of operation. BOLD’s A-rating indicates that decentralized, crypto-native stablecoins can achieve top-tier safety ratings.
AUTHOR
Crypto journalist with years of experience providing in-depth analysis and news on blockchain and decentralized finance. With a keen eye for detail, Shahzaib delivers insightful articles that explore the latest trends, market movements, and innovations within the crypto and blockchain ecosystem. His work focuses on educating readers while offering expert commentary on the evolving landscape of digital assets, DeFi protocols, and the broader impact of blockchain technology.
Liquity V2 is a decentralized borrowing protocol on Ethereum mainnet.
It enables you to:
Borrow against ETH at fixed ratesEarn 6-10% yield on BOLD (crypto-native, not TradFi)BOLD recently received an A- rating from Bluechip, higher than USDC (B+) and DAI (B+).
This guide will help you get started with Liquity V2 and will provide you with the most useful resources
Want to borrow against your ETH?Go to: https://liquity.app/borrowDeposit the collateral (ETH, wstETH, rETH) to mint the stablecoin BOLD. You choose your desired LTV as well as set your own interest rate. The rate management can be delegated to a third party.Video guide.
Want to earn with BOLD?Go to: https://liquity.app/earnStability Pools - 6-10% APY
Deposit BOLD, earn borrower interest + liquidation premiumsBest for: Users comfortable with occasional ETH exposureYield bearing tokens sBOLD (K3 Capital) and yBOLD (Yearn)
Auto-compounding version of Stability PoolBest for: Passive position and DeFi composabilityLPing in the two core pools on Uniswap and Curve - 10%+ APY
Yield dashboard.
Resources:Website: https://www.liquity.org/User Docs & Audits: https://docs.liquity.org/Protocol Stats: https://dune.com/liquityFor any other questions, join the Liquity community on Discord.
STRC drops to near $80, marking another new all-time low.
According to Bitget market data, Strategy’s preferred stock STRC has dropped to a low of $80.26, hitting a new all-time low since its listing. Calculated based on a $100 par value, the current discount has reached 20%.
5 minutes ago
OKX will launch CARDS spot trading today.
According to an official announcement, OKX will launch spot trading for CARDS (Collector Crypt) today. CARDS deposits will open at 18:00 UTC+8 on June 25, pre-ordering for the CARDS/USDT trading pair will run from 19:00 to 20:00 UTC+8, spot trading will officially commence at 20:00 UTC+8, and withdrawal functions will be available at 22:00 UTC+8.
5 minutes ago
Iran's Revolutionary Guards Corps warned that any vessels using the Strait of Hormuz route without Tehran's approval will be targeted.
Iran's Islamic Revolutionary Guard Corps (IRGC) issued a stern warning to international shipping on Wednesday, stating that any new shipping route through the Strait of Hormuz established without coordination with Tehran is unacceptable and dangerous, and threatening to take direct action against vessels that ignore its orders. The IRGC declared that vessels can only safely transit the Strait of Hormuz via routes designated by Iran. The IRGC Navy added that all vessels seeking to transit the strait must coordinate with the Iranian military via International Maritime Distress and Safety Frequency Channel 16, a requirement that effectively places Iranian military approval at the core of all commercial shipping transiting this key chokepoint. (Jinshi)
5 minutes ago
A crypto whale holding 120,000 ETH long positions has an unrealized loss of over $77 million, and added $8 million in margin in the early hours.
According to on-chain analyst ai_9684xtpa’s monitoring, a whale holding 120,000 ETH in long positions added $8 million in margin in the early hours. Currently, the total unrealized loss on its ETH long positions across four linked addresses stands at approximately $77.047 million, with an average entry price of around $2,265. Data shows the liquidation prices for the four addresses are $1,174.6, $1,059.1, $1,064.7, and $1,143.6 respectively. Despite the significant paper losses, there remains a large buffer before liquidation, and over 6 million USDC is still held on-chain to replenish margin, resulting in low short-term liquidation risk.
5 minutes ago
A crypto whale holding 120,000 ETH long positions is sitting on an unrealized loss of over $77 million, and added $8 million in margin in the early hours.
According to on-chain analyst ai_9684xtpa’s monitoring, the whale holding a long position of 120,000 ETH added $8 million in margin again in the early hours. Currently, the ETH long positions across its four associated addresses have accumulated an unrealized loss of approximately $77.047 million, with an average entry price of around $2,265. Data shows the liquidation prices for the four addresses are $1,174.6, $1,059.1, $1,064.7, and $1,143.6 respectively. Despite the massive unrealized loss, there is still a significant buffer before liquidation, and over 6 million USDC are still held on-chain to supplement margin, leading to low short-term liquidation risk.
5 minutes ago
Ripple's stablecoin RLUSD approved to enter Japanese market
According to official announcements, Ripple’s stablecoin RLUSD has been officially approved by Japan’s Financial Services Agency (JFSA) and launched in Japan. Through a partnership with SBI Group and its subsidiary trading platform VCTRADE, RLUSD will be accessible to institutional and retail users for use in scenarios including payments, asset tokenization, and collateral management.
Token unlock involves releasing tokens that were previously blocked under fundraising terms. Projects carefully schedule these releases to avoid market pressure and prevent a drop in token prices.
However, factors like lack of liquidity or early investor profit-taking can significantly impact an asset’s dynamics. Here are three major unlocks to watch next week.
Taiko (TAIKO) Unlock date: September 5 Number of tokens unlocked: 12 million TAIKO Current circulating supply: 63.09 million TAIKO Taiko is a decentralized Layer-2 scaling solution for Ethereum, leveraging ZK-Rollup technology. The protocol operates in a permissionless manner, allowing community members to participate in network operations
On September 5, Taiko will unlock a substantial portion of its TAIKO tokens, representing 19% of the current circulating supply. The project will distribute the newly released tokens to participants in the Trailblazer program.
Read more: Layer-2 Crypto Projects for 2024: The Top Picks
TAIKO Unlock. Source: token.unlocksImmutable (IMX) Unlock date: September 6 Number of tokens unlocked: 32.47 million IMX Current circulating supply: 1.57 billion IMX Immutable is a Layer-2 solution for scaling NFTs on the Ethereum blockchain. In September 2021, the project raised $12.5 million during the IMX token sale on the CoinList platform in just one hour. In March 2022, it closed a $60 million investment round and secured an additional $200 million from investors, including ParaFi Capital, Declaration Partners, and Tencent Holdings.
On September 6, the circulating supply of IMX will increase by 32.47 million tokens. These newly unlocked coins will be allocated to the development of the project and the broader Immutable ecosystem.
Read more: What Is Immutable?
IMX Unlock. Source: token.unlocksMode (MODE) Unlock date: September 6 Number of tokens unlocked: 500 million MODE Current circulating supply: 1.3 billion MODE Mode Network is a modular Layer-2 network focused on DeFi, built on Optimism’s Bedrock upgrade. The network features a unique contract revenue-sharing incentive at the protocol level, where both DApps and users that contribute to the Mode blockchain receive a portion of the network sequencer’s profits.
This current unlocking event involves 500 million tokens, nearly 40% of the circulating supply. Despite this, no additional unlocks are scheduled for more than six months. However, the community remains skeptical about this tokenomics design.
“For the coming week, there are 4 unlocks at more than 2% but we will especially have to watch $TAIKO which will unlock 19% of its supply on September 5 and $MODE on September 6 which will unlock 38.46% of its supply. Super tokenomics,” one X user commented.
Read more: Optimism vs. Arbitrum: Ethereum Layer-2 Rollups Compared
MODE Unlock. Source: token.unlocksOther next-week cliff unlocks include dYdX (DYDX), Liquity (LQTY), Hashflow (HFT), and Ethena (ENA), with a total value exceeding $77 million. Although many consider unlocks bearish, a well-planned schedule can strengthen a project’s long-term viability. Aligned with milestones and development progress, unlocks will motivate team members, boost community engagement, and promote ecosystem growth.
