LibraryCredit and stable value2024Design paperCorpus record
Liquity V2: user-set rates and batched liquidations
Liquity V2. Liquity.
Liquity V2 documents a collateralised debt position where the borrower sets an interest rate and competes for redemption ordering, rather than paying one protocol-wide fee.
A reading of the project's public design document. Not a copy, not a benchmark, and not an offer.
Liquity V2 documents a collateralised debt position where the borrower sets an interest rate and competes for redemption ordering, rather than paying one protocol-wide fee.
- Evidence
- Primary paper
- Re-measured
- No
- Assumptions
- 3
- Records linked
- 3
01 Claim ledger
What the paper is allowed to say
Each row is a sentence already in the study. The status is the same on every row: a model claim, not a live measurement.
Claim 01 · Paper model
The defect
The original Liquity study is the first system. V2's rate market is a different mechanism. Do not describe it as the same CDP with a new coat of paint.
Claim 02 · Paper model
The proposal
Liquity V2 documents a collateralised debt position where the borrower sets an interest rate and competes for redemption ordering, rather than paying one protocol-wide fee.
Claim 03 · Paper model
The mechanism
A trove or position has a collateral and a debt. The user-set rate determines how the position is treated when someone redeems.
Claim 04 · Paper model
The bound
No minimum collateral ratio is copied here. It lives in the deployment.
02 Three cuts
Observation, model, falsifier
A desk does not stop at the summary. Each claim is cut three ways, using only this study's own assumptions and checks. Nothing here is a new figure.
01 The defect
Observation
What the study says
The original Liquity study is the first system. V2's rate market is a different mechanism. Do not describe it as the same CDP with a new coat of paint.
Model
What has to hold
You are reading Liquity's V2 technical docs. The v1 paper is a different study.
Falsifier
What would retire it
What does a low user-set rate expose the position to?
02 The proposal
Observation
What the study says
Liquity V2 documents a collateralised debt position where the borrower sets an interest rate and competes for redemption ordering, rather than paying one protocol-wide fee.
Model
What has to hold
You are reading Liquity's V2 technical docs. The v1 paper is a different study.
Falsifier
What would retire it
What does a low user-set rate expose the position to?
03 The mechanism
Observation
What the study says
A trove or position has a collateral and a debt. The user-set rate determines how the position is treated when someone redeems.
Model
What has to hold
No price, supply, yield, or adoption figure is added by this desk.
04 The bound
Observation
What the study says
No minimum collateral ratio is copied here. It lives in the deployment.
Model
What has to hold
You are reading Liquity's V2 technical docs. The v1 paper is a different study.
03 Sequence
One action, as an operating tape
- 01A trove or position has a collateral and a debt. The user-set rate determines how the position is treated when someone redeems.
- 02Redemption pays debt holders from the lowest-rate positions first, if that is the rule on the page you opened. That ordering is the design.
- 03Liquidation is still a collateral rule. A user-set rate does not stop a collateral crash.
04 Load-bearing
The argument, and where a pitch drops it
What the name has to mean
The cut
Liquity V2 documents a collateralised debt position where the borrower sets an interest rate and competes for redemption ordering, rather than paying one protocol-wide fee.
Why it carries weight
If this cut is skipped, the paper's name is being used without the mechanism that makes the name mean anything.
Where it is dropped
This is not Liquity v1. The study of v1 stays separate.
What actually moves
The cut
Redemption pays debt holders from the lowest-rate positions first, if that is the rule on the page you opened. That ordering is the design.
Why it carries weight
If this cut is skipped, the paper's name is being used without the mechanism that makes the name mean anything.
Where it is dropped
A later client, parameter or reward formula is a different object from this paragraph.
What a later deployment may change
The cut
Liquidation is still a collateral rule. A user-set rate does not stop a collateral crash.
Why it carries weight
If this cut is skipped, the paper's name is being used without the mechanism that makes the name mean anything.
Where it is dropped
No minimum collateral ratio is copied here. It lives in the deployment.
05 Register
What has to be true
Model · Not re-measured
You are reading Liquity's V2 technical docs. The v1 paper is a different study.
Model · Not re-measured
The document is the one at the source URL. A marketing page with the same brand is not this text.
Model · Not re-measured
No price, supply, yield, or adoption figure is added by this desk.
06 Divergence
What happened after the paper
A peg is not promised by this note.
A later client, parameter set, or reward formula is a different object. Cite this paper for the mechanism. Cite a primary release for the network. This desk has not re-run the proof.
07 Pre-mortem
What to check before you use the idea
- 0 of 3 marked on this browser. A mark is a reading note, not a pass, a rating, or a recommendation.
08 Anatomy
The paper, in the order a builder needs
The problem it names
The original Liquity study is the first system. V2's rate market is a different mechanism. Do not describe it as the same CDP with a new coat of paint.
What the design proposes
- A trove or position has a collateral and a debt. The user-set rate determines how the position is treated when someone redeems.
- Redemption pays debt holders from the lowest-rate positions first, if that is the rule on the page you opened. That ordering is the design.
- Liquidation is still a collateral rule. A user-set rate does not stop a collateral crash.
How the mechanism is specified
- A trove or position has a collateral and a debt. The user-set rate determines how the position is treated when someone redeems.
- Redemption pays debt holders from the lowest-rate positions first, if that is the rule on the page you opened. That ordering is the design.
- Liquidation is still a collateral rule. A user-set rate does not stop a collateral crash.
What this page does not treat as proven
- No minimum collateral ratio is copied here. It lives in the deployment.
- This is not Liquity v1. The study of v1 stays separate.
- A peg is not promised by this note.
Why the desk still reads it
Liquity V2 documents a collateralised debt position where the borrower sets an interest rate and competes for redemption ordering, rather than paying one protocol-wide fee.
09 Lexicon
Terms, opened into the record
- User-set rate
- An interest rate the borrower chooses, which also orders them for redemption.
- Redemption
- A direct swap of the debt token for collateral through the protocol's ordering, not a market trade.
10 Repository
Every linked record on this page
Underlined words open a page that already exists: a concept, a protocol profile, a failure record, or another paper. If a word is not underlined, this desk does not have a record for it.
Concepts
Papers
This is Blockchain Lab's reading of a public design paper. It is not the paper, not a copy of it, and not an offer of tokens, equity, custody or a partnership. Later network behaviour can diverge from the text. Nothing here is investment, legal or technical advice.
Research status: Design paper. Last reviewed: 1 October 2026. This is a reading of a public paper, not investment, legal or security advice.