Staking LQTY in V2: A BOLD New Way to Align Incentives

With Liquity V2 just around the corner, the new LQTY staking module breaks away from the precedent set by voting escrow (ve) systems.

It offers a sustainable, community-driven model that puts long-term stakers first—with zero dilution risk and no need for locks.

Here are four reasons why staking LQTY stands out:

1. Dual Rewards

Staking LQTY in V2 unlocks rewards from both V1 and V2, offering stakers BOLD adoption as well as continued participation in LUSD.

This lack of opportunity cost ensures that the Liquity community does not find itself split between V1 and V2.

2. No long-term lockups

Unlike “ve” models that require long-term lock-ups, Liquity V2 gives stakers the flexibility to unstake at any time. There are no upfront costs, giving you freedom and flexibility to stay aligned with the protocol without needing to commit your tokens for years.

This approach also avoids the dilution risks commonly seen in ve-models, given the maturity of LQTY and its lack of ongoing supply emissions.

3. Stake longer, gain more power

The longer you stake, the more voting power you accumulate, giving you real influence over protocol decisions. Plus, as Liquity evolves, your ability to drive initiatives grows—and with it, the potential to get paid for your governance decisions.

4. Immutable, yet flexible

Liquity V2’s core is immutable—trustless and secure—but the voting model is complementary. The fixed 25% of protocol revenue for incentivized liquidity gives LQTY stakers the power to direct rewards to high-impact initiatives. Plus, the veto mechanism allows stakers to propose and vote on adding or removing modules, keeping community influence front and center while safeguarding decentralization.

LQTY staking in V2 offers a sustainable, community-driven approach that prioritizes long-term stakers without the risk of dilution.

It is not only rewarding—it’s about being BOLD enough to shape the future of V2 with real flexibility and impact.