When you deposit BOLD into the Liquity V2 Stability Pool, you are essentially doing two things: earning a share of the interest paid by borrowers, and using your BOLD to "buy" liquidated collateral at a discount when liquidations occur. The yield comes from 75% of protocol revenue. There is no lock-up period for deposits, but your BOLD principal will gradually decrease as liquidations happen, while you receive ETH/LST as compensation.
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What the Stability Pool Actually Does
The Stability Pool is the core mechanism that maintains BOLD's peg in Liquity V2. When a borrower's Trove falls below the liquidation threshold, the system burns a corresponding amount of BOLD from the Stability Pool to repay that Trove's debt, while transferring the collateral in the Trove (WETH, wstETH, or rETH) to the depositors in the Stability Pool.
Your deposited BOLD principal does not stay constant. Each time a liquidation occurs, you share a proportional amount of the burned BOLD based on your deposit share, and you receive a proportional amount of the liquidated collateral. Because liquidations happen at positions below 100% collateral ratio (for example, the liquidation line for wETH is around 91%), the value of the collateral you receive is usually higher than the value of the BOLD you lose. The difference is your liquidation gain.
Choosing a Pool: Three Separate Markets, No Cross-Risk
Liquity V2 is not like V1, which had only one ETH-collateralized pool. It is split into three independent Stability Pools based on collateral type: WETH pool, wstETH pool, and rETH pool.
Each pool only absorbs liquidations from its corresponding collateral, and only shares the interest revenue from its corresponding borrowing market. If you deposit into the wstETH pool, you will receive wstETH during liquidations, not a mix of ETH or other LSTs. This design lets you control which collateral exposure you are willing to accept.
If you are unsure which one to choose, a practical way to decide is: which asset would you rather receive when a liquidation happens? If you are long-term bullish on ETH and do not want to manage LST redemptions, the WETH pool is the most straightforward option.
Where Does the Yield Come From? Interest Sharing Is the Main Part
There are two sources of yield in the Stability Pool:
First, 75% of borrower interest. Liquity V2 distributes 75% of the interest revenue from each borrowing market directly to the depositors in the corresponding Stability Pool, paid in BOLD. This is "real yield" — it comes from actual fees paid by borrowers, not token emissions.
Second, liquidation gains. Each time a liquidation happens, you receive collateral at a discount using your BOLD. The protocol does not automatically sell this collateral for you. You need to decide whether to hold it or swap it back to BOLD.
The yield rate is not fixed. It depends on the interest rate paid by borrowers in the borrowing market, and the size of the Stability Pool relative to the total borrowing size. If a large amount of BOLD circulates outside the pool, a smaller pool relative to the borrowing size means depositors receive a larger share of interest, and the effective yield can exceed the average borrowing rate.
Depositing and Exiting: No Lock-up, Operate Anytime
The process of depositing into the Stability Pool is straightforward: on the Liquity V2 interface, select the collateral branch you want to deposit into (WETH, wstETH, or rETH), approve BOLD, and confirm the deposit. After depositing, your BOLD starts accumulating interest yield.
There is no lock-up period for exiting. You can withdraw your BOLD and accumulated collateral gains at any time. When you exit, the interface will settle both your BOLD deposit balance and any unclaimed collateral.
One operational detail worth noting: when you deposit, the protocol does not automatically claim previously accumulated collateral gains for you. These gains remain in the pool as "unclaimed" until you actively claim them, or they are taken out together when you exit.
Risks You Need to Understand
Your principal will decrease. Each liquidation burns a portion of your BOLD. This is not a "loss" because you receive collateral of equal or higher value at the same time, but your BOLD balance in the Stability Pool will keep declining. If you need to withdraw a fixed amount of BOLD at any time, you need to understand this mechanism in advance.
Collateral prices can fall. You receive ETH or LST, not US dollars. If the price of the collateral drops quickly after a liquidation, the gains from your "discounted purchase" on paper may be offset by price fluctuations, or even become an unrealized loss.
Smart contract risk. Liquity V2's contracts have been audited, but no DeFi protocol can completely rule out the possibility of contract vulnerabilities or economic model exploitation. Yearn's yBOLD product documentation also explicitly warns about Liquity V2's protocol risk and Stability Pool loss risk.
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References
- Liquity·Guide to Liquity V2, published or updated: 2025-05-19; verified: 2026-10-10.
- Yearn Docs·yBOLD, no update date indicated; verified: 2026-10-10.
- IPOR Labs·Liquity Stability Pool Integration, published or updated: 2025-10-23; verified: 2026-10-10.
- Liquity·Liquity V2: BOLD Stability Pool opportunities, published or updated: 2024-04-29; verified: 2026-10-10.
- IPOR Labs·LiquityStabilityPoolFuse.sol, published or updated: 2026-01-07; verified: 2026-10-10.
- Liquity Docs·BOLD & Earn, published or updated: 2026-02-02; verified: 2026-10-10.
- DeFi Saver·Dashboard & Use-case, published or updated: 2025-11-03; verified: 2026-10-10.
- Liquity·Understanding Liquity's Stability Pool, published or updated: 2021-04-20; verified: 2026-10-10.
- DeFi Saver·Revenue Distribution and Forkanomics, published or updated: 2025-11-03; verified: 2026-10-10.
- Liquity GitHub·Stability Pool reward claiming flexibility, published or updated: 2026-05-16; verified: 2026-10-10.
