LQTY
LQTY is the secondary token of the Liquity protocol - a decentralised, immutable, and governance-free borrowing protocol that issues the LUSD (V1) and BOLD (V2) stablecoins.
LQTY holders' onchain power is voting on V2 Protocol Incentivized Liquidity (PIL) emissions. The rest of the protocol is described as "Governance Free" with immutable contracts and no admin keys, upgrade paths, or privileged roles.
Neither LQTY holders nor the protocol team can influence core protocol execution - all core protocol parameters are immutable after launch. LQTY holders' onchain governance role is limited to voting on Protocol Incentivized Liquidity (PIL) emissions, directing a portion of V2 revenue to community-chosen liquidity initiatives.
There are no privileged roles in the core protocol. All core protocol contracts are immutable after launch with no admin functions, owners, or upgrade keys.
Core Liquity protocol contracts are non-upgradeable and do not use proxy patterns.
The LQTY token contract is immutable with no proxy patterns or upgrade mechanisms.
Fixed 100M LQTY token supply. No mint() function or inflation pathway in the bytecode.
No privileged roles. The only thing LQTY holders can do is vote for PIL emissions.
No Guardian or blacklist capabilities exist in the LQTY token contract.
Stakers earn two live onchain streams: V1 protocol fees (ETH redemption fees + LUSD borrowing fees) routed directly to LQTYStaking, and V2 bribes paid pro-rata to voters who allocate their voting power to initiatives. There is no protocol treasury - V2 sends 100% of revenue straight to users. Fee parameters and revenue routing are immutable and cannot be modified by governance or the team.
LQTY holders receive two live, onchain value streams.
Liquity V1 - protocol revenue to stakers. Staked LQTY earns fees routed directly to the V1 LQTYStaking contract: redemption fees (paid in ETH) are forwarded by TroveManager, and borrowing fees (paid in LUSD) are forwarded by BorrowerOperations. Every staker accrues a pro-rata share via the F_ETH and F_LUSD accumulators - no voting required.
Liquity V2 - bribes to voters. V2 governance is built on top of V1 staking, so V2 participants automatically receive the V1 fee streams above. Stakers who additionally allocate their voting power to an initiative can claim a pro-rata share of bribes (BOLD plus an initiative-specific token) deposited by external parties for that epoch.
There is no protocol treasury. Liquity V2 skips the concept of a centralized treasury and sends 100% of its revenue straight to its users.
The V1 fee accrual mechanism is immutable - neither the core team nor LQTY holders can change the fee parameters or the routing of fees to the LQTYStaking contract, since the core protocol contracts are non-upgradeable and expose no admin or governance hooks over these parameters. V2 governance (PIL + bribes) lets LQTY voters direct a separate slice of V2 revenue to liquidity initiatives, but explicitly has no control over core protocol parameters, which are immutable after launch.
The protocol is entirely onchain - Aragon is not aware of any offchain entities towards which value accrues to the LQTY token or otherwise.
Both the LQTY token and core Liquity protocol contracts (V1 and V2) are open source on GitHub and source-verified against their onchain deployments - no closed-source components or unverified bytecode.
The LQTY token contract source code (LQTYToken.sol) is publicly available on GitHub and verified on Etherscan.
Liquity protocol contracts are open source on GitHub.
LQTY supply is fully circulating - team and investor lockups ended in 2022, leaving only the immutable Stability Pool emission schedule for V1 depositors. Concentration among third parties has not yet been independently verified.
Aragon has not yet verified that 3rd parties do not hold more than 50% of voting power
It's all circulating - vesting ended in 2022, which can be verified by looking at the events emitted by the LockupContractFactory. The only remaining non-circulating LQTY is what the contract releases on an immutable schedule to Stability Pool depositors in V1.
Offchain dependencies for LQTY (trademark/brand, primary domain, and core software licensing) are controlled by Liquity AG, a Swiss company. LQTY tokenholders have no governance rights or control over Liquity AG. The core V1 protocol is immutable and governance-free, but brand, distribution, and V2 IP rights remain with the company.
The Liquity brand and related trademarks are owned and controlled by Liquity AG (Swiss company). No tokenholder-controlled legal entity is involved.
Liquity AG controls the primary domain liquity.org and the frontend registry. However, the company explicitly does not run any user-facing frontend. All frontends are operated by independent third parties. No tokenholder-controlled entity controls distribution.
Core protocol software and IP (V2) is owned by Liquity AG and released under a multi-year Business Source License (BUSL). Commercial deployments before ~September 2027 require approval from Liquity AG.
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