Liquity V2’s decentralized stablecoin, BOLD, has secured an ‘A-‘ rating from digital asset rating agency Bluechip, outscoring industry titans USDC and DAI (both ‘B+’). The assessment, disclosed by the development team in a Reddit AMA today, positions the Ethereum-backed token as a top-tier safety contender despite its fraction of the market share.
The "A-" Verdict
Bluechip’s rating framework awarded BOLD perfect scores (1.0) in Management, Decentralization, and Governance. The agency cited BOLD’s immutable code and lack of centralized control as key differentiators against fiat-backed stablecoins like Circle’s USDC, which introduce counterparty risk via bank deposits. While PayPal’s PYUSD also holds an ‘A-‘, Liquity claims BOLD is the only contender to achieve this tier using exclusively crypto-native collateral (ETH and Liquid Staking Tokens).
“BOLD is designed so users don’t need to trust issuers, banks, or governance committees, only the code,” wrote Michael Svoboda, Liquity CEO.
Mechanism: The Governance-Free Interest Rate
The high governance score stems from Liquity V2’s radical shift away from the DAO model used by MakerDAO (DAI). Instead of token holders voting on interest rates, BOLD borrowers set their own rates. This creates an open market for borrowing costs: borrowers paying higher rates are prioritized for protection against redemptions, while those paying less risk having their positions closed first to maintain the peg.
Yield and Market Reaction
Liquity V2 directs 100% of protocol revenue back to users, a stark contrast to centralized issuers that retain yield from reserve assets. Specifically, 75% of borrowing fees flow to the Stability Pool, creating a native yield source for BOLD stakers derived from real revenue rather than inflationary token emissions.
Despite the validation, the market remained tepid. Liquity’s governance token, LQTY, traded sideways at $0.34 (+2%) with a circulating market cap of just $33 million, reflecting the massive gap between BOLD’s technical ratings and its current adoption curve compared to multi-billion dollar incumbents.
