Liquity Investigates Potential Issue

The team behind Liquity, a lending protocol on the Ethereum network, announced on Wednesday that it is investigating a potential issue regarding its Liquity V2 Stability Pools.

They urged users to close their positions as a precaution.

“The Liquity team was informed of a potential issue affecting Liquity V2 Stability Pools and is currently investigating its impact,” they stated on the social media platform X.

The team is working to confirm the issue and seek solutions, asserting that the protocol continues to operate as expected and to their knowledge, no users have been affected by the potential issue. Therefore, it is advised that Liquity V2 users close their Stability Pool positions.

Additionally, the platform’s stablecoin BOLD and staked positions on Liquity’s secondary token LQTY remain unaffected, allowing borrowers to withdraw their collateral assets.

Liquity V2, launched on January 23, introduced a feature enabling users to set preferred interest rates when borrowing against ETH and staked ETH from platforms like RocketPool or Lido.

The “Earn” stability pools provide users with protocol yield from interest and liquidations for depositing BOLD.

The Block has reached out to the Liquity team for further comment.