Liquity BOLD

Decentralized Multi-Collateral Stablecoin·Active·Global

BOLD is the stablecoin issued by Liquity V2 (launched 2024). Multi-collateral (ETH, wstETH, rETH) at 110% minimum CR, user-set interest rates (continuous, no fixed fees), hard redemption mechanism, immutable smart contracts, and per-collateral stability pools. The V2 evolution of Liquity's debt-based but governance-minimal stablecoin design. Survived a February 2025 Stability Pool incident requiring redeployment.

M69 Score

Methodology →

3.4

Partially aligned

Monetary Sovereignty

3.2

Civilizational Durability

3.8

Universal Adoption

3.2

Framework v0.2-alphaRated today

M69 Verdict

BOLD is the USD-pegged stablecoin issued by Liquity V2, launched on Ethereum mainnet in January 2025 and redeployed (with patches following a Stability Pool vulnerability disclosure) in May 2025. Unlike LUSD (Liquity V1, ETH-only with a one-time fee), BOLD is multi-collateral — accepting ETH, wstETH (Lido), and rETH (Rocket Pool) — and uses user-set, continuous interest rates. Higher-rate borrowers receive lower redemption priority, creating a market-driven monetary policy. All core contracts are immutable, the protocol is non-custodial, and a hard-redemption mechanism guarantees that anyone can redeem 1 BOLD for $1 of collateral from the lowest-rate troves. From an M69 perspective, BOLD inherits the strong architectural DNA of Liquity V1: immutable governance-minimal contracts, permissionless CDP-style minting, fully on-chain mechanics, and crypto-native (non-fiat) collateral. Its key M69 strengths are sovereignty (immutable code, non-custodial, censorship-resistant), fiat independence on the collateral side (zero fiat reserves — only ETH/LSTs), and a robust on-chain peg-management mechanism. The chief weaknesses are USD-denomination (which automatically caps SPS and FI), the debt-based issuance model (which caps IM-02), early-stage traction (V2 is only ~16 months old, ~$110M TVL, narrow merchant adoption), and a notable February 2025 Stability Pool vulnerability that required a full redeployment — limiting RE-01 crisis credibility for V2 specifically. BOLD sits in the "Partially aligned" band: it is one of the most M69-aligned USD stablecoins available (rivaling LUSD), but the USD anchor and debt-based issuance prevent it from reaching higher tiers without architectural shifts toward a sovereign unit of account.

Key Findings

Architecture is BOLD's standout strength

Governance scored 4.4 and Sovereignty 4.0 because Liquity V2's core monetary mechanics are fully immutable — no admin keys, no upgradeability, no governance override of issuance, peg, or interest logic. Governance can only direct 25% of revenue (PIL) and cannot touch the money. This is best-in-class M69 alignment on the "technology as guardian" dimension (SO-09 = 5, GO-06 = 5, GO-08 = 5).

USD peg and debt-based issuance are structural ceilings

FI-01 = 1 (hard USD peg) and IM-02 = 1 (purely debt-based minting) are baked into the design. Even with zero fiat in collateral (FI-02 = 5), the USD unit of account caps Fiat Independence at 3.2 and SPS-02 at 2. BOLD cannot reach the higher M69 tiers without rethinking its unit of account.

V2-specific crisis history weakens Resilience compared to V1

The February 2025 Stability Pool vulnerability — though contained with no user fund loss — required a full redeployment in May 2025. This caps RE-01 at 2 for V2 specifically. V2 inherits LUSD's crisis pedigree on the codebase level, but BOLD itself has not yet weathered a major live collateral crash or macro stress event.

Traction is the gating constraint, not Money Design

With ~$110M TVL, ~16 months of live operation, and effectively zero real-world merchant adoption (TR-04 = 1, TR-05 = 2), BOLD remains a DeFi-native instrument. Strong partner integrations (Chainlink CCIP, Lido, Rocket Pool, Curve, Morpho, Balancer, friendly forks) and a coherent narrative (TR-11 = 4) point to upside, but adoption is the most binding limit on the overall score.

Friendly-forks model is unusually M69-aligned

BOLD's "friendly fork" strategy (Arbitrum, Berachain, Hyperliquid, Scroll) gives it a strong score on FI-07 (local currency composability) and FI-08 (open monetary interoperability), echoing M69's "global standard, local expression" commandment more than most stablecoins.

Big takeaway — best-in-class USD stablecoin architecture, but USD itself is the ceiling

BOLD is arguably the most M69-aligned crypto-collateralized USD stablecoin live today: immutable, non-custodial, censorship-resistant, debt-but-overcollateralized, governance-minimal, and globally accessible. Its overall 3.4 score reflects the conceptual tension at the heart of the M69 framework: even an exemplary USD-pegged design is ultimately tethered to the dollar's purchasing power decay. For partners, BOLD is a top-tier substrate within the USD-stablecoin category; for the M69 vision, it represents the asymptotic limit of what is achievable without leaving the dollar entirely.

M69 Score

M69 Alignment3.4

Partially aligned

1.02.03.04.05.0

Monetary Sovereignty3.2

Issuance (3x) + Stability (2x) + Fiat Indep. (2x)

Civilizational Durability3.8

Sovereignty + Governance + Resilience

Universal Adoption3.2

Traction (2x) + Inclusivity

Iss Mod3x

3.2

Stability2x

3.3

Fia Ind & Int2x

3.2

Traction2x

2.9

Sovereignty

4.0

Governance

4.4

Resilience

3.0

Inclusivity

3.9

Scored against the Money2069 Manifesto — see methodology. Higher = more aligned.

Detailed Rating Breakdown

Issuance Model3x

3.2

Code	Question	Score
IM-01	Is issuance permissionless?Anyone can open a trove and mint BOLD by locking ETH/wstETH/rETH at min 110% CR with no KYC; permissionless on-chain action. [1]	4
IM-02	Is new supply created through debt?BOLD is minted exclusively as debt against collateralized troves with user-set interest; purely debt-based issuance. [1]	1
IM-03	Is issuance tied to measurable real-world economic activity?Issuance is tied to ETH/LST collateral value — crypto-native, not real-economy linked (no labor, commodity basket, or CPI signal). [1]	2
IM-04	Does the issuance model have a supply cap or hard ceiling?Fully elastic supply, no hard cap; supply expands as troves open and contracts via repayments/redemptions/liquidations symmetrically with demand. [1]	5
IM-05	Can supply contract (burn/redemption) as well as expand?Hard redemption (anyone redeems 1 BOLD for $1 collateral from lowest-rate troves), repayments, and liquidations all burn BOLD permissionlessly and automatically. [1]	4

Spending Power Stability2x

3.3

Code	Question	Score
SPS-01	What mechanism does the protocol use to target spending power stability?Multi-layered: (a) overcollateralization with liquidations via per-collateral Stability Pools, (b) hard redemption at $1, (c) user-set interest rates that adjust as a market-driven monetary policy. Reactive on-chain mechanisms tied to threshold breaches and continuous arbitrage. [1]	4
SPS-02	What benchmark is used to measure spending power?Pegged to USD ($1 target) — moderate-stability fiat reference with known multi-percent annual inflation. [1]	2
SPS-03	How transparent and verifiable is the stability measurement?Peg mechanism is fully on-chain and open-source; price discovery via Chainlink oracles (multiple feeds); redemptions and liquidations auditable in real time on Ethereum. [1]	4
SPS-04	What is the protocol's historical deviation from its stability target?V2 launched Jan 2025, redeployed May 2025 after SP patch; under 18 months live. BOLD has reportedly traded close to peg post-redeployment but lacks 1-3 year track record; some early deviation around the February 2025 incident. [1]	3
SPS-05	Does the protocol distinguish between short-term volatility and long-term purchasing power drift?Targets short-term USD price stability only; no mechanism addresses long-term USD purchasing power decay (no inflation index, no demurrage). [1]	3
SPS-06	Is the stability mechanism accessible globally?Permissionless on-chain protocol with no geographic restrictions; redemption and stability mechanisms function identically for any user worldwide; multi-chain via Chainlink CCIP. [1]	5

Fiat Independence & Interoperability2x

3.2

Code	Question	Score
FI-01	What is the protocol's unit of account?Hard-pegged 1:1 to USD; unit of account fully borrowed from USD. [1]	1
FI-02	What is the fiat composition of the protocol's collateral or reserves?Zero fiat exposure — collateral is exclusively ETH (WETH), wstETH, and rETH. Entirely non-fiat crypto-native collateral. [1]	5
FI-03	Does the protocol depend on fiat banking infrastructure to function?No banking relationships required; core protocol is fully on-chain. Off-ramps to fiat exist via third-party exchanges but are not protocol dependencies. [1]	5
FI-04	Are the protocol's price feeds and oracles fiat-denominated?Chainlink oracles report ETH/USD, wstETH/USD, rETH/USD — all USD-denominated, sourced from decentralized oracle networks. [1]	2
FI-05	What happens to the protocol if the primary fiat currency it references collapses or depegs?BOLD targets $1 — if USD collapses, BOLD's nominal value follows USD downward and the stability target becomes meaningless. Protocol mechanics survive but unit of account fails. [1]	2
FI-06	Does the project have a credible transition path from fiat-dominated adoption to fiat-independent operation?No documented roadmap for moving off USD denomination; USD peg appears designed as permanent rather than transitional. [1]	2
FI-07	Can local or sectoral currencies be denominated in or settle against this currency?"Friendly forks" (e.g., Arbitrum, Berachain, Hyperliquid, Scroll deployments) demonstrate composability: the codebase can be redeployed as parallel stablecoin systems with shared CCIP-based settlement. [1]	4
FI-08	Does the protocol define open standards for interoperability with other monetary systems?BOLD adopted Chainlink CCIP as cross-chain standard; multiple friendly-fork implementations exist; open-source code is reference implementation for others. [1]	4

Traction2x

2.9

Code	Question	Score
TR-01	Is the project still active?Fully active on Ethereum and multiple L2s (Arbitrum, Base, Optimism) via CCIP; growing integrations. [1]	5
TR-02	How long has the project been in existence?V2 mainnet launched January 2025 (redeployed May 2025); approximately 16 months live as of May 2026. [1]	2
TR-03	How many active users does the project have?TVL of ~$110M and active borrower base in low thousands; no precise unique-borrower count published but on-chain trove counts indicate sub-10K active users. [1]	2
TR-04	How many businesses or organizations accept the project's currency?BOLD is primarily a DeFi instrument; held in protocols (Curve, Balancer, Morpho pools, DeFi Saver) but virtually no real-world merchant acceptance. [1]	1
TR-05	Is the currency used as a unit of account?Quoted in USD ($1 target); not used as a native unit of account — prices, contracts, wages are not natively denominated in BOLD. [1]	2
TR-06	Is the founder or core team still actively working on the project?Liquity AG and core team active; CEO Michael Svoboda and team driving V2 development, audits, and ecosystem expansion. [1]	5
TR-07	What partner organizations or institutions support or integrate the project?Chainlink (CCIP), Lido (wstETH), Rocket Pool (rETH), Curve, Uniswap, Balancer, Morpho, DeFi Saver, Lagoon Finance, friendly forks across multiple chains — well over 10 integrations. [1]	5
TR-08	Is the project covered or recognized by credible external sources?Covered by Messari, DeFiLlama, MixBytes, threesigma; multiple security audits published; community/research coverage strong in DeFi. [1]	4
TR-09	Is adoption organic — not dependent on subsidies, incentives, or mandates?Mixed: 25% of protocol revenue is directed to Protocol Incentivized Liquidity (PIL) to bootstrap pools; meaningful organic borrow demand but incentives are central to liquidity. [1]	3
TR-10	What is the growth trend over the past 12 months?TVL grew from $0 at relaunch (May 2025) to ~$110M direct TVL, peaked $177M cross-chain in Nov 2025; revenue and integrations growing; some recent TVL pullback. [1]	4
TR-11	Does the project have a coherent narrative and cultural identity that drives long-term commitment?Strong "governance-minimal, immutable, decentralized" narrative; engaged community continuing from LUSD; identity rooted in self-sovereign borrowing principle. [1]	4

Sovereignty

4.0

Code	Question	Score
SO-01	Can any single entity shut down the project?Immutable smart contracts on Ethereum; no admin keys, no pause, no upgrade authority over core monetary mechanics. No single entity can shut it down. [1]	5
SO-02	Is the project's core infrastructure permissionless and self-hostable?Fully open-source (GitHub liquity/bold); contracts deployed on Ethereum; any user can interact directly or host front-ends. [1]	5
SO-03	Is the project subject to the jurisdiction of a single nation-state?Liquity AG is Swiss-incorporated, but protocol is permissionless and operates without legal dependency. Swiss-based entity is meaningful but protocol is jurisdictionally neutral. [1]	4
SO-04	Does the project control or custody user funds?Fully non-custodial; users hold their own keys, troves owned by depositors, redemption is permissionless. [1]	5
SO-05	Is the project resilient to key-person risk?Immutable contracts mean post-deployment no individual is critical to operation; team distributed; founder Robert Lauko stepped back; CEO and contributors are not single-point-of-failure. [1]	4
SO-06	Does the project depend on any third-party service that could be revoked?Dependent on Ethereum L1 (broad-based), Chainlink oracles for collateral prices (concentrated dependency), Chainlink CCIP for multi-chain. Migration paths exist but not trivial. [1]	3
SO-07	Can the project be censored — can specific users or transactions be blocked?No blacklist/freeze capability in core protocol; front-ends may be censored but contracts are directly accessible. [1]	4
SO-08	Does the protocol protect transaction privacy as a monetary right?Pseudonymous as default Ethereum standard; no built-in privacy features; transaction graph fully public. [1]	3
SO-09	Does the technology enforce the project's monetary rules such that governance cannot silently override them?Core monetary rules (issuance, supply, peg mechanism, interest, redemptions) are immutable in smart contracts; governance can ONLY direct PIL allocation, not change monetary mechanics. Best-in-class on this dimension. [1]	5

Governance

4.4

Code	Question	Score
GO-01	How are decisions about the project made?Core monetary rules are immutable — no decision-making over them. PIL allocation decisions follow formalized on-chain LQTY voting with documented procedures. [1]	4
GO-02	Who has voting or decision-making power, and how is that power distributed?LQTY stakers; voting power increases linearly with stake duration. LQTY distribution moderately concentrated but no single party controls majority. [1]	3
GO-03	Is the governance process — and the monetary mechanism itself — transparent and publicly auditable?All votes, proposals, and protocol logic are fully on-chain; open-source code; immutable issuance fully auditable in real time. [1]	5
GO-04	Can governance be captured by a small group or hostile actor?Even captured governance can only redirect PIL (25% of revenue) — core mechanics remain immutable. Capture risk is limited in scope by design. [1]	5
GO-05	How are upgrades and changes to the protocol or project proposed and executed?Core protocol cannot be upgraded; any change requires a brand-new deployment (as occurred May 2025). For PIL, formal proposal/vote process exists. [1]	4
GO-06	Is there a separation between governance over monetary policy and governance over operational decisions?Hard structural separation: monetary policy is immutable (no governance over it), operational/PIL decisions are governed. Best-in-class separation. [1]	5
GO-07	Does the project have a constitution, charter, or set of immutable principles?Immutability and governance-minimalism are encoded directly in the smart contracts — the strongest possible form of constitutional protection. Whitepaper articulates principles. [1]	5
GO-08	Can the project's issuance rules be changed, and are monetary policy changes subject to stronger constraints than operational changes?Issuance rules are fully immutable — changing them is impossible without a wholly new contract deployment. Strongest possible protection. [1]	5

Resilience

3.0

Code	Question	Score
RE-01	Has the project survived a major crisis or adversarial event?V2 specifically experienced a February 2025 Stability Pool vulnerability disclosure with ~$30M outflows; isolated, no user funds lost, but required full redeployment in May 2025. Inherits codebase lineage from V1 which survived multiple crises, but V2's own track record shows mechanism failure requiring re-launch rather than survival under live stress. [1]	2
RE-02	Does the project have redundancy in its critical infrastructure?Multiple independent front-ends and integrations; Chainlink oracle redundancy; but oracle infrastructure is a concentrated dependency. [1]	4
RE-03	Can the project recover from a catastrophic failure?Open-source code, public on-chain state, deterministic mechanics make rebuild possible by any competent team; redeployment in May 2025 itself demonstrated recovery capability. [1]	5
RE-04	Is the project's design simple enough to be maintained and understood long-term?V2 added significant complexity vs V1 (multi-collateral, per-collateral SPs, user-set interest, batch delegation); core mechanism is documented in whitepaper but more complex than V1. [1]	3
RE-05	Is the project dependent on a specific technology that could become obsolete?Built on Ethereum (widely supported); EVM-compatible forks exist across multiple chains; no near-term obsolescence risk. [1]	4
RE-06	How does the project handle economic stress (bank runs, liquidity crises, collateral crashes, inflation/deflation shocks)?Has per-collateral Stability Pools, overcollateralization, hard redemption, dynamic user-set rates, shutdown mechanism for extreme oracle scenarios; mechanisms designed but V2 hasn't faced a live major collateral crash since relaunch. [1]	3
RE-07	Does the project have sustainable funding for long-term maintenance?Protocol generates ~$1.48M annualized fees with treasury and LQTY token; immutable contracts reduce maintenance burden; sustainable but not endowment-level. [1]	4
RE-08	Can the system operate across extreme latency, disconnected networks, and multi-century timescales?Requires real-time Ethereum consensus and oracle updates; not designed for high-latency or disconnected operation. [1]	2
RE-09	Is the system designed for a world where AI agents are primary economic actors?Fully programmable smart contract interface; AI agents can interact via standard EVM calls; no human-only gates. [1]	4

Inclusivity

3.9

Code	Question	Score
IN-01	Can anyone in the world participate regardless of nationality, wealth, or status?Permissionless, no KYC, anyone with Ethereum wallet can borrow or hold BOLD. Practical barrier of gas fees on L1 partially mitigated by L2 deployments. [1]	4
IN-02	What is the minimum cost to start using the project?Borrowing requires opening a trove with non-trivial collateral and paying L1 gas; minimum debt is 2,000 BOLD which is a meaningful entry barrier for low-income users. Holding BOLD has no minimum. [1]	3
IN-03	Does the project actively serve underbanked or financially excluded populations?Not specifically designed for underbanked; primary user base is DeFi-native crypto holders; no targeted outreach to financially excluded. [1]	2
IN-04	Does the project distribute economic benefits — including seigniorage — broadly, or concentrate them among insiders?75% of interest goes to Stability Pool depositors (any BOLD holder), 25% to PIL voted by LQTY stakers; no fixed insider treasury take from issuance. Broadly distributed by protocol design, though LQTY token distribution had founder/team/investor allocations. [1]	4
IN-05	Does the project treat all participants equally under the same rules?Identical rules: every trove obeys same liquidation, redemption, and interest mechanics. No VIP tiers, no preferential rates. [1]	5
IN-06	Does the project require identity documentation or surveillance to participate?No identity requirement; fully pseudonymous Ethereum interaction; no data collection by the protocol. [1]	5
IN-07	Does the project have mechanisms to prevent wealth concentration over time?No anti-concentration mechanisms (no demurrage, no progressive fees); staking rewards proportional to holdings can passively encourage concentration. [1]	2

Frequently Asked Questions

What is Liquity BOLD and what problem does it solve?

BOLD is a USD-pegged stablecoin issued by Liquity V2, launched on Ethereum mainnet in January 2025 and redeployed in May 2025 after a contained Stability Pool vulnerability. It solves the problem of building a decentralized, censorship-resistant USD stablecoin without governance over monetary mechanics: anyone can mint BOLD by depositing ETH, wstETH, or rETH at a minimum 110% collateralization ratio, set their own interest rate, and the protocol is governance-minimal — core code is immutable, with no admin keys or upgradeability over issuance, peg, or interest logic.

How does BOLD maintain its $1 peg?

BOLD uses three layered mechanisms: (1) overcollateralization (minimum 110% CR) with per-collateral Stability Pools that absorb liquidations, (2) hard redemption — anyone can redeem 1 BOLD for $1 worth of collateral from the lowest-interest-rate troves, creating a continuous arbitrage floor, and (3) user-set interest rates that act as a market-driven monetary policy: higher-rate borrowers receive lower redemption priority. Chainlink oracles provide on-chain ETH/USD, wstETH/USD, and rETH/USD price feeds.

What collateral backs BOLD?

BOLD is backed exclusively by crypto-native, non-fiat collateral: ETH (WETH), Lido's wstETH, and Rocket Pool's rETH. There is zero fiat exposure — no USDC, no Treasury bills, no bank deposits. This gives BOLD one of the strongest fiat-independence profiles on the collateral side of any major USD stablecoin (FI-02 score: 5/5).

Why did Liquity V2 redeploy in May 2025?

In February 2025, a Stability Pool vulnerability was disclosed that caused approximately $30M of outflows. No user funds were lost, but the issue was severe enough to require a full redeployment of patched contracts, which went live in May 2025. Because Liquity V2's contracts are immutable by design, there is no upgrade path — fixing critical issues requires deploying a new system. This caps the V2-specific crisis-survival score (RE-01 = 2) until BOLD weathers a major live event without redeployment.

How is governance structured in Liquity V2?

Governance is intentionally minimal and structurally limited. Core monetary rules (issuance, peg mechanism, interest, redemptions, supply) are fully immutable — no governance authority can change them. LQTY stakers vote only on Protocol Incentivized Liquidity (PIL) allocations, which direct 25% of protocol revenue to bootstrap liquidity in DeFi pools. This means even captured governance cannot touch the money supply or peg mechanics (GO-04 = 5, GO-06 = 5, GO-08 = 5).

What is BOLD's current adoption and TVL?

As of May 2026, Liquity V2 has approximately $110M in TVL directly, with cross-chain TVL peaking around $177M in November 2025. BOLD is integrated with Chainlink CCIP, Lido, Rocket Pool, Curve, Balancer, Morpho, DeFi Saver, Lagoon Finance, and has friendly-fork deployments on Arbitrum, Berachain, Hyperliquid, and Scroll. However, real-world merchant acceptance is essentially zero — BOLD is a DeFi-native instrument.

What is BOLD's M69 score and how does it compare?

BOLD scores 3.4/5.0 ("Partially aligned") on the M69 framework. It is arguably the most M69-aligned crypto-collateralized USD stablecoin live today, with best-in-class scores on Governance (4.4), Sovereignty (4.0), and Inclusivity (3.9). The score is bounded by structural USD-pegging (FI-01 = 1) and purely debt-based issuance (IM-02 = 1), which together create a ceiling for any USD-denominated stablecoin in the M69 framework.

How do user-set interest rates work?

Unlike Liquity V1 (which charged a one-time fixed fee), V2 allows each borrower to set their own continuous interest rate when opening a trove. The trade-off is that troves with the lowest interest rates are redeemed first when BOLD trades below $1 — so borrowers must balance interest cost against redemption risk. This creates a market-driven, decentralized monetary policy: aggregate borrower behavior sets the effective rate of the system without any central decision-maker.

Is BOLD censorship-resistant?

Yes — there is no blacklist or freeze capability in the core protocol. Smart contracts are immutable on Ethereum with no admin keys, no pause function, and no upgrade authority. Front-ends may be censored at the application layer, but contracts can be interacted with directly. Users are pseudonymous (standard Ethereum), with no KYC, identity collection, or geographic restrictions. (SO-01 = 5, SO-07 = 4, IN-06 = 5).

What's the minimum to use BOLD?

Borrowing requires opening a trove with a minimum debt of 2,000 BOLD plus enough ETH/wstETH/rETH collateral to maintain 110% CR, plus L1 gas fees. This is a meaningful entry barrier for low-income users. Holding or transferring BOLD, however, has no protocol-level minimum — anyone with an Ethereum-compatible wallet can hold any amount.

Where does BOLD's revenue go?

Approximately 75% of borrower interest payments flow to Stability Pool depositors (who can be any BOLD holder), and 25% is directed to Protocol Incentivized Liquidity (PIL), allocated by LQTY-staker votes. There is no fixed founder or treasury take from issuance. This broad distribution scores well on inclusivity (IN-04 = 4).