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Intro article covering the main innovations and the logic behind it.
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On the differences between liquidations and redemptions.
In Liquity v2 liquidation and redemption risks are split.
Liquidations happen when your LTV is too high.
Redemptions happen when your interest is too low.
By doing this, users can at the same time be very capital efficient (high LTV), while having zero redemption risk (high…
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A deep dive into user-set rates.
Market-driving mechanism
Less redemptions
Better peg
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An explainer on v2 redemptions and why they are much better then in v1.
How redemptions work in Liquity v2
Whenever $BOLD < $1.00 arbitrageurs make instant profit, market buying it for ~$0.99 and selling for $1.00.
This makes for an extremely robust downward peg mechanism.
See LUSD in Q3 & Q4 2023.
But who get's redeemed?
In Liquity v1 those with…
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How $BOLD maintains its peg.
A stablecoin must be stable.
That's why we dug deep when designing $BOLD, to ensure this is the case.
While $LUSD is the most resilient stablecoin in existence, it has one Achilles heel; there is no way to bring it down to peg.
When demand for a secure store of value is high,…
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A massively improved borrowing experience.
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Redemptions decreasing by A LOT.
I mean it.
v2 will significantly reduce redemption volumes!
Redemptions are a decentralized way to repeg a
#stablecoin
to the upside.
They are also a thorn in the foot of Liquity borrowers, and the users of other protocols which apply the same approach - like Gravita or Forksma.
v2 will…
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Market leading, sustainable stablecoin yield.
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Sustainable, market-leading stablecoin yield?
Look no further.
Yesterday the Liquity v2 stablecoin-earn article dropped (link below).
Let me break it down for you - if you want real yield, you should read on.
v2 introduces 100% sustainable economics and all the yield will be paid out in either $BOLD or (staked) $ETH.
It follows the well…
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v2 money flow visualized
The whitepaper is THICC.
So I extracted the only thing you care about.
How the moni in v2 flows.
I made it really primal, based and basic, so there is no chance you'd mid-curve this shit.
You're welcome.
*bonus points if you comment: 'wen tokenomics 😠'
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v2 will bring a DeFi native market rate.
Liquity v2 is not a stablecoin issuer.
Liquity v2 is not a borrowing protocol.
Liquity v2 is the first DeFi market rate creator!
Let me explain.
Currently, there are two main methods of setting rates in this industry:
1. TradFi-based
While various forms exist they all mimic…
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@bjnpck
What mechanism will be used to get this new protocol to be able to be used on L2s? If, I'm assuming, this new app won't be multichain like liquity can't be, right?
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@TakeTheWealth
Integrations batching and transferring txs L2<>L1.
Similar to what
@Nimbora_
are doing for Liquity right now.
We are in talks with a couple teams so this should be live reasonably fast after launch.
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@bjnpck
@LiquityProtocol
Will it affect the $LQTY token in any way? Is $LQTY linked in any way to liquity V2?
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@ycrypto_y
@LiquityProtocol
We have not made any communication around tokenomics yet.
We are working over legal implications and hoping to be able to say something in the near future.
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@bjnpck
1/ To whom are the interest payments directed in the Liquity system? Are they distributed to Stability Pool participants, $LQTY stakers, or another party?
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@xbthinking
Most of it to the Stability Pool, to enable hold demand, a good chunk goes also to liquidity providers.
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@bjnpck
2/ In Liquity v1, redemptions trigger the liquidation of Troves with the lowest ICR first. In the upcoming v2, will the interest rate set by borrowers also influence the liquidation order, and if so, does the ICR still play a role in this process?
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@xbthinking
No, liquidations will work the same as in v1. Whenever a users drops below MCR he's eligible for liquidation.
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