Liquity (LQTY) is the native token of Liquity Protocol, a
decentralized borrowing platform built on
Ethereum that lets users take out interest-free loans by depositing ETH or liquid staking tokens as collateral. The protocol mints decentralized
stablecoins, LUSD in Liquity V1 and BOLD in the upgraded V2, while maintaining over-collateralization and robust liquidation mechanisms. Liquity is designed to be censorship-resistant, fully decentralized, and governed by immutable smart contracts.
Liquity works by allowing users to open a “vault," called a Trove in V1 or a Vault in V2, and mint stablecoins against their collateral. Instead of charging ongoing interest, Liquity uses one-time fees and algorithmic stability tools such as redemptions and user-set interest rates in V2 to maintain the stablecoin’s peg and ensure system solvency. Collateral ratios are enforced programmatically, and automatic liquidations help protect the protocol during market volatility.
The LQTY token powers protocol incentives and governance within Liquity V2. Holders can stake LQTY to earn a share of protocol revenue, distributed in
ETH and LUSD, while also voting on Protocol Incentivized Liquidity (PIL) emissions that help strengthen liquidity across the ecosystem. This combination of decentralized lending, algorithmic stability, and revenue-sharing incentives makes Liquity one of the most unique and capital-efficient borrowing platforms in
DeFi.
When Did Liquity Launch?
Liquity (LQTY) was conceptualized in 2019 by blockchain researcher Dr. Robert Lauko, who envisioned a decentralized, capital-efficient stablecoin borrowing platform, and later partnered with Solidity developer Rick Pardoe to build the protocol. The project underwent development and audits throughout 2020 before officially launching on the Ethereum mainnet on April 5, 2021, with its interest-free lending system and LQTY rewards live from day one. Early backing came from major crypto investors like Polychain Capital and Pantera Capital, helping establish Liquity as a notable DeFi project focused on immutable
smart contracts and low-cost borrowing.
Liquity's Key Roadmap Milestones
- April 5, 2021: Liquity Protocol V1 deployed on Ethereum
mainnet with LUSD and LQTY token issuance.
- 2021–2022: Growth of Stability Pools, front-end integrations, and community adoption.
- November 2024: Preparations and audits for Liquity V2 upgrade focusing on multi-collateral support.
- 2025: Liquity V2 re-launch on Ethereum with BOLD stablecoin, user-set rates, and Protocol Incentivized Liquidity (PIL).
What Is the LQTY Token Utility?
LQTY is the core utility and incentive token of the Liquity Protocol, designed to reward users and support decentralized governance in Liquity V2. Holders can stake LQTY to earn a share of protocol revenue, paid out in ETH and LUSD/BOLD, while also gaining voting power to direct Protocol Incentivized Liquidity (PIL) emissions, which determine where the protocol allocates liquidity incentives. LQTY also plays a role in strengthening ecosystem participation, as stakers help guide collateral onboarding, yield parameters, and long-term stability mechanisms of the protocol.
You can trade LQTY tokens on the
BingX spot market by creating an account, funding your wallet with
USDT, and searching for the
LQTY/USDT trading pair. Simply place a
market or limit order to buy or sell LQTY, and your trade will execute instantly on BingX’s high-liquidity spot order book.
What Is Liquity Tokenomics?
Liquity’s tokenomics revolve around LQTY, the governance and incentive token that powers the protocol’s second stablecoin system. In Liquity V2, LQTY adopts a Curve-inspired tokenomics model, giving stakers the ability to vote on where Liquity’s protocol revenue is directed. All borrowing fees generated by users minting the new BOLD stablecoin are immediately redistributed to liquidity providers, with no treasury, no middleman, and no revenue retention by the Liquity team. This aligns token incentives directly with the protocol’s growth.
LQTY holders who stake their tokens gain voting rights to guide Protocol Incentivized Liquidity (PIL), which determines where emissions and revenue flows should support liquidity pools across DeFi. Importantly, stakers cannot change core protocol parameters, preserving Liquity’s historic commitment to immutability while adding targeted flexibility to stimulate BOLD adoption. This design helps balance decentralization, competitive yields, and long-term stability for both borrowers and liquidity providers.
Liquity V2’s tokenomics address limitations observed in LUSD’s lifecycle by introducing borrower-chosen interest rates, multi-collateral options including liquid staking tokens, and structured incentives for deep, decentralized liquidity. These upgrades encourage participation from both large, risk-sensitive borrowers and decentralization-focused users. Combined with ecosystem expansion through approved forks on
Layer-2 networks, Liquity’s updated tokenomics aim to grow BOLD’s market share and strengthen the value proposition of LQTY as a governance and revenue-directing asset.
How to Stake LQTY Tokens on Liquity
You can stake LQTY directly in the Liquity V2 Staking Contract, where stakers earn a share of protocol revenues, distributed in ETH, LUSD, or BOLD depending on the borrowing activity in the system. Staking also gives you voting power to direct Protocol Incentivized Liquidity (PIL), allowing you to influence where Liquity allocates rewards to deepen liquidity across DeFi. There is no lock-up period, so users can stake or unstake at any time without penalties, making LQTY staking flexible and accessible for both beginners and advanced DeFi users.
To stake LQTY, connect your
crypto wallet, such as
MetaMask, to the official Liquity V2 interface, deposit the amount of LQTY you want to stake, and confirm the transaction on Ethereum. Once staked, your tokens immediately begin earning protocol revenue, and you can claim rewards or adjust your stake whenever you choose. This mechanism strengthens Liquity’s decentralized governance while rewarding long-term ecosystem participation.
What Is the Difference Between Liquity V1 and V2?
Liquity V1 introduced interest-free borrowing against ETH with a single stablecoin, LUSD, and immutable parameters, offering extreme decentralization but limited flexibility. Liquity V2 builds on this by adding multi-collateral support, including liquid staking tokens, a new stablecoin called BOLD, and borrower-chosen interest rates instead of the fixed one-time fee used in V1.
V2 also introduces Curve-style tokenomics, allowing LQTY stakers to direct protocol revenue through Protocol Incentivized Liquidity (PIL), which supports liquidity providers. Importantly, V2 maintains immutability for core parameters while adding targeted flexibility to improve liquidity, user incentives, and long-term stability across DeFi.
What Blockchain Network Does Liquity Operate on?
Liquity operates entirely on the Ethereum blockchain, leveraging Ethereum’s security, decentralization, and mature DeFi ecosystem to support its stablecoin borrowing protocol. Both Liquity V1 (with LUSD) and Liquity V2 (with BOLD and multi-collateral borrowing) run on Ethereum smart contracts, with all core parameters deployed immutably on-chain. While the Liquity team supports optional forks on various
Layer-2 networks, the official Liquity protocol and the LQTY token remain native to Ethereum.
Which Wallets Store LQTY Tokens?
You can store LQTY tokens directly on BingX, which offers a secure, convenient, and beginner-friendly option for managing your assets. Keeping LQTY on BingX allows you to access fast trading, portfolio monitoring, and exchange-level security without needing to manage private keys. This is the easiest option if you actively trade or hold LQTY as part of your BingX spot portfolio.
LQTY is also an ERC-20 token, so it is supported by all major
Ethereum-compatible wallets, including
MetaMask,
Trust Wallet,
Base App,
Ledger, and Safe (formerly Gnosis Safe). These wallets let you fully interact with Liquity’s
on-chain features such as LQTY staking, governance voting, and participating in decentralized liquidity pools. For maximum safety, many long-term holders prefer
hardware wallets like Ledger or
Trezor, which store private keys offline while still supporting ERC-20 tokens like LQTY.
Is Liquity (LQTY) a Good Investment?
Liquity (LQTY) is considered a compelling investment for users who believe in decentralized stablecoin systems and revenue-sharing token models. With the launch of Liquity V2, LQTY gains expanded utility by allowing stakers to direct protocol revenue toward liquidity providers while earning ETH- and stablecoin-based rewards from borrowing activity.
Its fixed supply of 100 million tokens adds scarcity, and the protocol’s immutability helps attract risk-aware borrowers and decentralization-focused users. As demand for decentralized, Ethereum-native stablecoins and liquid staking collateral grows, LQTY benefits from increasing borrowing volume, deeper liquidity, and broader DeFi integrations, making it a strong candidate for users seeking exposure to sustainable, fee-generating DeFi infrastructure.