# Liquity V2

Liquity V2 is a lending protocol that allows you to borrow against your ETH and Liquid Staking Tokens (rETH and wstETH only), and mint the BOLD stablecoin that:

* inherits LUSD resilience,
* provides sustainable yield,
* has minimal centralized risk, and 
* benefits from improved peg dynamics.

With Liquity V2, you no longer have to depend on fixed governance rules for your borrowing costs. You can set your interest rate based on market conditions and risk tolerance.

Below you can find a breakdown of the main differences between Liquity V1 and Liquity V2:

| Liquity              | V2                                     | V1                            |
| -------------------- | -------------------------------------- | ----------------------------- |
| Collateral           | ETH & LSTs                             | ETH                           |
| Interest rate        | User-set rate                          | One-time 0.5% fee             |
| Maximum LTV          | Up to 91%                              | 91%                           |
| Recovery mode        | No recovery mode                       | 150%                          |
| Liquidation ratio    | \~91% (depending on the coll.)         | \~91% (66% in recovery mode)  |
| Liquidation penalty  | \~5% (exeptionally 10%)                | \~10%                         |
| Redemptions          | Yes (less frequent)                    | Yes                           |
| Redemption logic     | Starting from low interest rate Troves | Starting from high LTV Troves |
| Redemption fee       | Goes to the affected borrower          | Goes to LQTY stakers          |
| Troves transferrable | ERC-721                                | No                            |

***

## Related Articles:

* [Dashboard & Use-case](https://help.defisaver.com/protocols/liquity-v2/dashboard-and-use-case)
* [Compatibility & Automations](https://help.defisaver.com/protocols/liquity-v2/compatibility-and-automations)
* [Borrowing Rates and Redemptions](https://help.defisaver.com/protocols/liquity-v2/borrowing-rates-and-redemptions)
* [Minimum Collateral Ratio (MCR)](https://help.defisaver.com/protocols/liquity-v2/minimum-collateral-ratio-mcr)
* [Troves as NFTs](https://help.defisaver.com/protocols/liquity-v2/troves-as-nfts)
* [Revenue Distribution and Forkanomics](https://help.defisaver.com/protocols/liquity-v2/revenue-distribution-and-forkanomics)
* [My trove was redeemed against, what are my options now?](https://help.defisaver.com/protocols/liquity-v2/my-trove-was-redeemed-against-what-are-my-options-now)