What is Liquity?

Liquity is a decentralized borrowing protocol built on Ethereum, designed to let users obtain interest-free loans using ETH as collateral. Its stablecoin, BOLD (with LUSD as its predecessor), is pegged to the US dollar and can be minted by locking up ETH in a smart contract known as a “Trove.” What sets Liquity apart is its non-custodial, immutable, and governance-free architecture—once deployed, its smart contracts cannot be altered or influenced by external parties. This ensures a high degree of decentralization and censorship resistance, distinguishing Liquity from many other DeFi lending platforms.

At the heart of Liquity’s design is a minimum collateral ratio of 110%, making it among the most capital-efficient lending solutions in DeFi. The protocol’s security and stability are maintained through a Stability Pool, where users deposit BOLD to absorb the debt from liquidated positions, and a network of borrowers who act as guarantors of last resort. This structure provides robust protection against defaults and market volatility. Liquity’s innovative approach has inspired numerous forks across different blockchains, each contributing to a growing ecosystem and incentivizing participation through airdrops and rewards.

Liquity Airdrop Details

Liquity’s airdrop program is unique in the DeFi landscape due to its multi-fork structure. Over 15 licensed forks of the Liquity protocol—operating across various blockchain networks—are participating in this initiative. Each fork has committed to allocating 4% of its token supply to Liquity ecosystem participants. This means that by engaging with the core Liquity protocol, users can potentially receive airdrops from multiple distinct projects, significantly amplifying their reward potential.

The primary beneficiaries of these airdrops are LQTY stakers, while Stability Pool depositors (those providing BOLD or LUSD, depending on the protocol version) may also be eligible for rewards. The airdrop program is ongoing, with eligibility snapshots and distribution timelines varying by fork. Users are generally advised to maintain their positions until the respective fork launches are completed. This multi-fork airdrop structure represents a unique opportunity for DeFi users to earn multiple token rewards through consistent participation in the Liquity ecosystem.

How to Participate in Liquity Airdrops

To maximize your chances of receiving Liquity and fork airdrops, follow these actionable steps:

1. Prepare Your Wallet

   • Download and set up a Web3 wallet compatible with Ethereum (MetaMask or Rabby recommended).
   • Secure your seed phrase and consider using a dedicated wallet for DeFi activities.

2. Acquire Required Assets

   • Purchase ETH on a centralized exchange (e.g., Binance) and transfer it to your wallet.
   • Swap ETH for LQTY (Liquity’s secondary token) and/or BOLD (or LUSD, depending on the version) using a decentralized exchange.

3. Stake LQTY Tokens

   • Visit an official Liquity frontend.
   • Connect your wallet and navigate to the “Staking” section.
   • Enter the amount of LQTY you wish to stake and confirm the transaction in your wallet.

4. Deposit BOLD/LUSD into the Stability Pool

   • On the Liquity frontend, go to the “Earn” or “Stability Pool” section.
   • Click the “+” button to supply BOLD or LUSD.
   • Enter the amount to deposit and confirm the transaction.

5. Monitor Fork Announcements

   • Stay updated on official Liquity channels and fork project announcements for specific airdrop eligibility requirements and timelines.
   • Some forks may require additional actions, such as providing liquidity to specific pools or minting NFTs.

6. Community Engagement (Optional)

   • Join official Discord, Telegram, or Twitter channels to stay informed and potentially participate in community-driven campaigns.

Note: Always verify airdrop details through official sources and never share your private keys.

Detailed Breakdown

Available Boosts/Multipliers

• Time-Weighted Voting Power: In Liquity V2, the longer you stake LQTY, the greater your voting power and potential share of rewards.
• Protocol Incentivized Liquidity (PIL): LQTY stakers can direct 25% of protocol revenue to external liquidity initiatives, potentially earning additional incentives or bribes.

Point Earning Opportunities

• Staking LQTY: Primary eligibility for multi-fork airdrops and protocol fee rewards.
• Depositing BOLD/LUSD in Stability Pools: Earn liquidation rewards (ETH), protocol fees, and may qualify for fork airdrops.
• Providing Liquidity for BOLD Pairs: Some forks reward LPs of their stablecoin-BOLD pairs with additional tokens.

Mission Types

• Borrowing: Open a Trove and mint BOLD/LUSD.
• Staking: Stake LQTY for protocol rewards and airdrop eligibility.
• Stability Pool Participation: Deposit BOLD/LUSD for liquidation and airdrop rewards.
• Liquidity Provision: Add liquidity to DEX pools as required by certain forks.

Timing and Details

• Airdrop Program: Ongoing, with over 15 forks confirmed to participate.
• Snapshot Dates: Vary by fork; maintain positions until fork launches are completed.
• No Maximum Participants: The program is open to all eligible users.

Maximizing Your Liquity Rewards

1. Stake LQTY for Multiple Airdrops: Staking LQTY is the most direct way to qualify for airdrops from all licensed forks.
2. Deposit in Stability Pools: Supplement your strategy by depositing BOLD/LUSD for additional rewards and airdrop eligibility.
3. Monitor Announcements: Stay alert for new fork launches and specific campaign requirements.
4. Use Auto-Compounding Services: Tools like B.Protocol or Yearn can help auto-compound rewards and save on gas fees.
5. Diversify Participation: Engage with both Liquity V1 (LUSD) and V2 (BOLD) to maximize exposure to different reward streams.
6. Manage Gas Fees: Batch transactions where possible and use Layer 2 solutions if supported by forks to reduce costs.
7. Maintain Healthy Collateral Ratios: Avoid liquidation by keeping your collateralization well above the minimum 110%.

Frequently Asked Questions

How many airdrops can I receive?
You can potentially receive airdrops from all participating licensed forks, currently numbering over 15. Each fork allocates a portion of its token supply to Liquity users.

Do I need to both stake LQTY and provide BOLD/LUSD to Stability Pools?
Staking LQTY is the primary requirement for most airdrops. Providing BOLD/LUSD to Stability Pools may offer additional opportunities, especially for fork-specific campaigns.

How long should I maintain my position?
No universal timeframe is announced. It’s recommended to maintain your positions until the relevant fork launches or airdrop snapshot dates are officially confirmed.

Are airdrop rewards guaranteed?
No. Eligibility does not guarantee rewards, and distribution is subject to each fork’s specific criteria and timelines.

Is it safe to participate?
Liquity is designed to be non-custodial and immutable, but all DeFi carries risks, including smart contract vulnerabilities and market volatility. Only use official frontends and never share your private keys.

Will gas fees affect my rewards?
Yes. Gas fees on Ethereum can be significant, especially during periods of network congestion. Consider this when deciding how frequently to interact with the protocol.

Conclusion

Liquity stands out as a capital-efficient, governance-free DeFi lending protocol with a robust security model and a thriving ecosystem of forks. Its innovative multi-fork airdrop program offers users the chance to earn rewards from over 15 partner projects by simply staking LQTY and/or participating in Stability Pools. With the launch of Liquity V2 and the BOLD stablecoin, the protocol is set to expand its reach and utility even further.

For DeFi users seeking exposure to multiple airdrops and ongoing rewards, early and sustained participation in the Liquity ecosystem presents a compelling opportunity. Stay connected to official channels, maintain your positions, and be proactive in monitoring new fork announcements to maximize your benefits.

Don’t miss out on future airdrop opportunities! Follow Liquity on Twitter, Telegram, and Facebook, and subscribe to the newsletter for the latest updates and new airdrop alerts.