DeFi
DeFi Lender Liquity to Undergo ‘Friendly Fork’ in V2 Upgrade
Liquity, a decentralized finance (DeFi) lender, is set to undergo a “friendly fork” as part of its v2 upgrade.
Liquity v2 will fix the flaws of v1
In a blog postThe protocol said it decided to go through with the friendly fork after intense reflection on the history of its v1. This revision, coupled with Liquity’s desire to take a more proactive approach with third-party deployment of its v2 upgrade, ultimately sees Liquity seeing the v2 codebase as the preeminent solution for launching a collateralized onchain stablecoin.
“Our vision is one in which Liquity v2 “friendly forks” propagate across all EVM-compatible blockchains, with independent teams building a broader ecosystem with aligned interests,” Liquity wrote.
It’s worth noting that Liquity v2 is designed to address the challenges of expanding the DeFi ecosystem. With that expansion comes competition for mindshare in an increasingly scarce market for users, builders, and liquidity. For stablecoins, networks often need to convince both stakers and liquidity providers to participate in the allocation.
Liquity called the move “costly.”
Apparently, this is where Liquity v2 plays a crucial role: the introduction of a “sovereign” stablecoin. This type of digital currency is minted against a portion of the native network’s collateral and kickstarts activity within the DeFi ecosystem, according to its update.
Getting to this roadmap proved challenging with Liquity v1. With the latest upgrades, these challenges may well be a thing of the past. Liquity v2 will support multi-collateral configurations and introduce user-defined interest rates, among other benefits.
The cryptocurrency market is seeing a growing popularity for stablecoins
This upgrade is one of the events surrounding the growing popularity of stablecoin among several entities, including governments.
Paxos Digital Singapore Pte. LTD., a key player in the cryptocurrency sector, recently obtained approval from the Singapore central bank to offer digital payment token services. Explicitly, this crucial authorization allows Paxos to issue stablecoins that comply with the regulatory framework established in the region. This is a significant expansion of the company’s global operations.
Similarly, popular stablecoin issuer Circle also received a Electronic Money Institution (EMI) License in accordance with the new Market for Crypto Assets (MiCA) regime in the European Union. This authorization makes Circle the first stablecoin company to become Mica compliant. Therefore, USDC and EURC stablecoins are available in accordance with EU regulations.
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