# What is BOLD? Liquity V2’s stablecoin

BOLD is Liquity V2’s dollar-referenced stablecoin, minted against supported ETH and liquid-staking collateral. Borrowers choose interest rates, which also affect their position in redemption ordering. Protocol redemption returns collateral under the system’s allocation rules, not bank dollars, and is different from a borrower repaying their own loan.

Evidence: [Liquity V2 overview](https://docs.liquity.org/v2-faq); [Liquity V2 redemptions and delegation](https://docs.liquity.org/v2-faq/redemptions-and-delegation)

Canonical: https://degreesofsatoshi.com/encyclopedia/what-is-bold/
Published: 2026-10-02
Substantively modified: 2026-10-02
Independently verified by an automated reviewer: 2026-10-02T19:26:58.461Z
Data current through: 2026-10-02

AI-assisted research and drafting with a separate automated source-verification pass; no external expert or named human review is implied.

## Key facts

- **Version:** BOLD is the V2 stablecoin, distinct from V1 LUSD. ([Liquity V2 overview](https://docs.liquity.org/v2-faq))
- **Rates:** V2 permits user-set borrowing interest rates. ([Liquity V2 overview](https://docs.liquity.org/v2-faq))
- **Ordering:** Redemptions begin with lower-interest Troves within the applicable collateral market. ([Liquity V2 redemptions and delegation](https://docs.liquity.org/v2-faq/redemptions-and-delegation))

## Collateral types create distinct exposures

Liquity V2 supports ETH and liquid-staking collateral types. These are not identical assets: a liquid-staking token adds its own staking and implementation dependencies. Identify the branch backing a borrowing position instead of treating all collateral as interchangeable ETH.

Holding BOLD itself is also different from opening a Trove or depositing into another BOLD product. Each action creates a different relationship to the system.

Evidence: [Liquity V2 overview](https://docs.liquity.org/v2-faq)

## A low borrowing rate has another consequence

Redemption ordering begins with lower-rate Troves within each collateral market. A borrower choosing a lower rate therefore changes more than the interest bill; they can move closer to the front of that ordering.

For a conceptual comparison, a 2% Trove can be reached before a 4% Trove in the same market under the documented ordering. These are hypothetical rates and do not predict when a redemption will occur.

Evidence: [Liquity V2 redemptions and delegation](https://docs.liquity.org/v2-faq/redemptions-and-delegation)

## The protocol chooses a collateral mix

The documentation allocates redemptions across collateral branches using their outside debt, which is debt minus the corresponding Stability Pool balance. The redeemer receives the resulting collateral mix after fees rather than freely selecting any one asset.

Redemption can reduce a borrower’s collateral and debt without being the same event as liquidation. A borrower should inspect both the redemption mechanism and health constraints. This description is scoped to the V2 documents checked on 2 October 2026.

Evidence: [Liquity V2 redemptions and delegation](https://docs.liquity.org/v2-faq/redemptions-and-delegation)

## Questions

### Can a BOLD holder demand US dollars from a central issuer?

The protocol redemption described here delivers collateral under Liquity V2 rules. It is not the same as direct fiat redemption of a cash-backed issuer stablecoin. Selling into bank money requires a separate route.

Evidence: [Liquity V2 redemptions and delegation](https://docs.liquity.org/v2-faq/redemptions-and-delegation)

## Claims and scope

### what-is-bold-quick-answer

BOLD is Liquity V2’s dollar-referenced stablecoin, minted against supported ETH and liquid-staking collateral. Borrowers choose interest rates, which also affect their position in redemption ordering. Protocol redemption returns collateral under the system’s allocation rules, not bank dollars, and is different from a borrower repaying their own loan.

Scope: {"collection":"stablecoins","dataAsOf":"2026-10-02","blockHeight":null}

### what-is-bold-fact-version

Version: BOLD is the V2 stablecoin, distinct from V1 LUSD.

Scope: {"collection":"stablecoins","dataAsOf":"2026-10-02","blockHeight":null}

### what-is-bold-fact-rates

Rates: V2 permits user-set borrowing interest rates.

Scope: {"collection":"stablecoins","dataAsOf":"2026-10-02","blockHeight":null}

### what-is-bold-fact-ordering

Ordering: Redemptions begin with lower-interest Troves within the applicable collateral market.

Scope: {"collection":"stablecoins","dataAsOf":"2026-10-02","blockHeight":null}

## Sources

- [Liquity V2 overview](https://docs.liquity.org/v2-faq) — Liquity. BOLD token, user-set borrowing rates and multiple collateral types. Locator: Differences to V1; collateral; interest. Retrieved: 2026-10-02T18:51:09.526Z.
- [Liquity V2 redemptions and delegation](https://docs.liquity.org/v2-faq/redemptions-and-delegation) — Liquity. BOLD redemption allocation and borrower-rate ordering; collateral is not fiat. Locator: Collateral split; lowest-interest Troves. Retrieved: 2026-10-02T18:51:09.432Z.

## Revision history

- 2026-10-02: First publication after primary-source research and separate automated verification.

## Cite this entry

Degrees of Satoshi editorial project. “What is BOLD? Liquity V2’s stablecoin.” Published 2026-10-02; updated 2026-10-02. https://degreesofsatoshi.com/encyclopedia/what-is-bold/