How Caper approaches this Cap…the opposite pole from Liquity, and the contrast is instructive. Liquity protects a fixed mon…ht (/wiki/governance/voting) is (held × votes) / (vote_supply × circulation) – a product ofcomes from two things together: the tokens they hold and a soulbound, non-transferable proof-record of-participation earned 1 per, one vote token earned for each ballot they cast, withich trades and transfers minting none (verified against compute_vote_weight in contracts/common/src/lib.rs and the DIVISIBILITY_MAXIMUM vote token in contracts/core/src/caper_dao.rs). The same figure sets each member's share of the treasury on exit – the weight itself, not a pro-rata slice by balancenever create. The same weight decides what a member takes when they leave (/wiki/foundations/leaving-a-caper) : they can exit any time for their fair share of the treasury. What a whale cannot cheaply …g that governance hard to buy.

Liquity is a decentralized bor…e from the opposite direction —– deliberately removing governa…rather than never granting it.

How Caper approaches this Cap…share of the treasury on exit —– the weight itself, not a pro-… buy is not the record itself —– casting a ballot earns it —– but another member's, because…g that governance hard to buy.

Project Liquity Category Dece… (V1) · BOLD (V2) Token LQTY —– 100M fixed supply, fee-captur…vernance Governance-minimised —– immutable core with no admin …tps://github.com/liquity/bold)

Liquity is a decentralized bor…ntals/dao-governance-models) —– a useful foil to the vote-esc…rather than never granting it.

Governance-free by design Liq…e team's own framing is blunt —– the design makes “human inte…m the one-token-one-vote norm —– there is simply nothing to vo… capture a token-weighted DAO.

The mechanism Liquity V1 issu…ral) and no ongoing interest —– borrowers pay a one-time fee … compensated in ETH plus LQTY —– a permissionless, always-on l…n emergency governance action.

Liquity V2 (BOLD): the smalles…s the immutability commitment —– core protocol parameters rem…//github.com/liquity/V2-gov) —– but adds one narrowly scoped … Curve-style incentive market —– complete with bribe markets …daos/lending/convex-finance) —– but bolted onto an otherwise …team could not patch in place —– an immutable protocol has no upgrade switch —– so V2 had to be redeployed fr…lso no committee to fix a bug.

Where it sits on the governanc…this wiki's ecosystem entries —– Curve (/wiki/daos/dexs/curve…the wider vote-escrow cluster —– answer “who decides?” by engi…o seize. The cost is rigidity —– the parameters that suit 2021… users. For the opposite pole —– a stablecoin whose borrow rat…are all live governance votes —– see Aave’s GHO (/wiki/daos/stablecoins/aave-gho) .

How Caper approaches this Cap…/ (vote_supply × circulation) —– a product of tokens held and …lutocratic one-token-one-vote —– but from opposite directions.…g that governance hard to buy.

How Caper approaches this Cap…uy is not the record itself — buying on the curvecasting a ballot earns it — but another member…g that governance hard to buy.

How Caper approaches this Cap…ation earned 1 per ballot cast and 0.01 per XRD of gross trade valu, with trades and transfers minting none (verified against compute_vo…g that governance hard to buy.

How Caper approaches this Cap…ame figure sets each member's pro-rata share of the treasury on exit — the weight itself, not a pro-rata slice by balance. What a whale cannot cheaply …g that governance hard to buy.

How Caper approaches this Cap…proof-of-participation earned by actually voting over tim1 per ballot cast and 0.01 per XRD of gross trade value (verified against compute_vo… share of the treasury on exit, so a purely financial position can never dominate a record of showing up. What a whale cannot cheaply buy is not the record itself — buying on the curve earns it — but another member's, because it never leaves the account that earned it. Both designs reject plutocr…g that governance hard to buy.

How Caper approaches this Cap…c/lib.rs and the DIVISIBILITY_NONEMAXIMUM vote token in contracts/core/…g that governance hard to buy.

How Caper approaches this Cap…pute_vote_weight in contracts/logiccommon/src/lib.rs and the DIVISIBILI…g that governance hard to buy.

Liquity is a decentralized bor…governance spectrum (/wiki/daos-governance/concepts/fundamentals/dao-gov…s Reflexer’s RAI (/wiki/daos/organizations/stablecoins/reflexer-rai) , wh…rather than never granting it.

Governance-free by design Liq… a governance token (/wiki/daos-governance/concepts/treasury/dao-tokenom… capture a token-weighted DAO.

Liquity V2 (BOLD): the smalles…te-buying dynamic (/wiki/daos/organizations/lending/convex-finance) — but…lso no committee to fix a bug.

Where it sits on the governanc… entries — Curve (/wiki/daos/organizations/dexs/curve-dao) , Convex (/wiki/daos/organizations/lending/convex-finance) , and … the attack surface (/wiki/daos-governance/concepts/analysis/dao-securit…— see Aave’s GHO (/wiki/daos/organizations/stablecoins/aave-gho) .

How Caper approaches this Cap…d against compute_vote_weight in contracts/logic/src/lib.rs and the DIVISIBILITY_NONE vote token in contracts/core/src/caper_dao.rs). The same fi…g that governance hard to buy.

Liquity is a decentralized bor…governance spectrum (/wiki/daos/concepts/fundamentals/dao-governance-models) — a us… is Reflexer’s RAI (/wiki/dao/ecosystems/organizations/stablecoins/reflexer-rai) , which lands a…rather than never granting it.

Governance-free by design Liq… a governance token (/wiki/daos/concepts/treasury/dao-tokenomics) : it captures … capture a token-weighted DAO.

Liquity V2 (BOLD): the smalles…vote-buying dynamic (/wiki/dao/ecosystems/organizations/lending/convex-finance) — but bolted…lso no committee to fix a bug.

Where it sits on the governanc…em entries — Curve (/wiki/dao/ecosystems/organizations/dexs/curve-dao) , Convex (/wiki/dao/ecosystems/organizations/lending/convex-finance) , and the wid… the attack surface (/wiki/daos/concepts/analysis/dao-security-and-governance-at…s — see Aave’s GHO (/wiki/dao/ecosystems/organizations/stablecoins/aave-gho) .

Liquity is a decentralized bor…bility and capture-resistance. Its closest sibling is Reflexer’s RAI (/wiki/dao/ecosystem/reflexer-rai) , which lands at the same immutable, ungoverned core from the opposite direction — deliberately removing governance rather than never granting it.

Where it sits on the governanc…n be turned against its users. For the opposite pole — a stablecoin whose borrow rate, mint caps, and peg backstop are all live governance votes — see Aave’s GHO (/wiki/dao/ecosystem/aave-gho) .

Project Liquity Category Decentralized borrowing protocol · collateral-backed stablecoin Chain Ethereum V1 launched 5 April 2021 (https://www.liquity.org/blog/liquity-goes-live-on-ethereum-mainnet) V2 (BOLD) launched 23 Jan 2025 (https://www.liquity.org/blog/liquity-v2-is-live) ; redeployed 19 May 2025 (https://www.liquity.org/blog/liquity-v2-redeployment) Stablecoins LUSD (V1) · BOLD (V2) Token LQTY — 100M fixed supply, fee-capture/staking token, not a governance token in V1 Governance Governance-minimised — immutable core with no admin key; V2 adds a single narrow lever (LQTY-staked incentive voting) that cannot touch core parameters Primary sources liquity.org (https://www.liquity.org/features/governance-free) · docs.liquity.org (https://docs.liquity.org) · GitHub (https://github.com/liquity/bold)

Liquity is a decentralized borrowing protocol on Ethereum whose defining choice is the near-total absence of governance. Where most DAO-adjacent protocols concentrate power in a token vote, Liquity's rules are fixed in immutable smart contracts with no admin key and no way for anyone to alter the system (https://www.liquity.org/features/governance-free) . That makes it the clearest real-world example of the minimal-governance pole on the DAO governance spectrum (/wiki/dao/concepts/dao-governance-models) — a useful foil to the vote-escrow and treasury-heavy models catalogued elsewhere in this wiki, and a live case study in the tradeoff between adaptability and capture-resistance.

Governance-free by design Liquity V1 has no admin key, no upgradability, and no token vote over its parameters (https://docs.liquity.org/liquity-v1/faq/general) . Instead of humans voting on monetary interventions, the protocol adjusts its own borrowing and redemption fees algorithmically: a base rate rises with redemption volume and decays over time, so fees respond to market pressure without a committee. The team's own framing is blunt — the design makes “human interventions redundant” (https://www.liquity.org/features/governance-free) . Crucially, the LQTY token is not a governance token (/wiki/dao/concepts/dao-tokenomics) : it captures protocol fee revenue and rewards Stability Pool depositors and front-end operators, but it grants no vote over the rules ( Liquity docs (https://docs.liquity.org/liquity-v1/faq/general) ). This separates Liquity sharply from the one-token-one-vote norm — there is simply nothing to vote on, so a large LQTY holder cannot capture the protocol the way a whale can capture a token-weighted DAO.

The mechanism Liquity V1 issues LUSD, a USD-pegged stablecoin, against ETH collateral with an unusually low 110% minimum collateral ratio (https://docs.liquity.org/liquity-v1/faq/general) and no ongoing interest — borrowers pay a one-time fee (0.5%–5%) rather than a recurring rate. The peg is defended by three algorithmic backstops instead of a governance dial: - Redemptions at face value. Anyone can always swap LUSD for $1 of underlying ETH, which arbitrages the price back toward the peg ( docs (https://docs.liquity.org/liquity-v1/faq/general) ). - The Stability Pool. LUSD deposited into the pool absorbs liquidated collateral, with depositors compensated in ETH plus LQTY — a permissionless, always-on liquidation engine that needs no keeper vote ( docs (https://docs.liquity.org/liquity-v1/faq/general) ). - Fellow borrowers as backstop. If the Stability Pool is ever exhausted, debt and collateral are redistributed across remaining borrowers, so the system stays solvent without an emergency governance action.

Liquity V2 (BOLD): the smallest possible governance surface Liquity V2 (https://www.liquity.org/blog/liquity-v2-is-live) launched in 2025 with a new stablecoin, BOLD, multiple collateral types (ETH and LSTs), and user-set interest rates. It keeps the immutability commitment — core protocol parameters remain immutable after launch (https://github.com/liquity/V2-gov) — but adds one narrowly scoped governance module, and nothing more. Through Protocol Incentivized Liquidity (PIL) (https://docs.liquity.org/v2-faq/lqty-staking) , LQTY stakers vote on where to direct roughly 25% of protocol revenue as liquidity incentives. Voting power is time-weighted (longer stakes weigh more), votes run in weekly epochs starting Thursdays 00:00 UTC (https://www.liquity.org/blog/voting-in-liquity-v2) , proposing a new initiative needs ≥0.01% of voting power plus a 100 BOLD fee, and initiatives below a 2% vote share for four consecutive epochs can be permissionlessly unregistered. This is explicitly a Curve-style incentive market — complete with bribe markets (https://www.liquity.org/blog/bribe-markets-in-liquity-v2-strategic-value-for-lqty-stakers) echoing the Convex/Votium vote-buying dynamic (/wiki/dao/ecosystem/convex-finance) — but bolted onto an otherwise ungovernable base layer. The governance module “has no control over any of the core protocol parameters” (https://github.com/liquity/V2-gov) : it can only decide where the incentive budget flows. The immutability commitment cuts both ways. When a Stability Pool issue was found after the January 2025 launch (https://www.liquity.org/blog/liquity-v2-redeployment) , the team could not patch in place — an immutable protocol has no upgrade switch — so V2 had to be redeployed from scratch on 19 May 2025 after further audits. Governance-minimisation buys capture-resistance at the cost of adaptability; there is no committee to blame, and also no committee to fix a bug.

Where it sits on the governance spectrum Liquity matters to DAO design precisely because it is the extreme case. Most of this wiki's ecosystem entries — Curve (/wiki/dao/ecosystem/curve-dao) , Convex (/wiki/dao/ecosystem/convex-finance) , and the wider vote-escrow cluster — answer “who decides?” by engineering ever-more-elaborate vote-weighting. Liquity answers it by removing the attack surface (/wiki/dao/concepts/dao-security-and-governance-attacks) : an immutable contract cannot be governance-captured, socially engineered into a malicious upgrade, or drained by a hostile proposal, because there is no privileged action to seize. The cost is rigidity — the parameters that suit 2021 are the parameters you keep, and fixing anything means shipping an entirely new protocol and migrating users. It is a deliberate bet that a small, fixed, well-audited rule set beats a flexible one that can be turned against its users.

How Caper approaches this Caper sits at the opposite pole from Liquity, and the contrast is instructive. Liquity protects a fixed monetary policy by making the protocol ungovernable; Caper makes governance the entire point but ties it to something a whale cannot cheaply buy. In a caper (/wiki/foundations/what-is-a-caper) the treasury is the governed object, and a member's vote weight (/wiki/governance/voting) is (held × votes) / (vote_supply × circulation) — a product of tokens held and a soulbound, non-transferable proof-of-participation earned by actually voting over time (verified against compute_vote_weight and the DIVISIBILITY_NONE vote token in contracts/src/caper_dao.rs). The same figure sets each member's pro-rata share of the treasury on exit, so a purely financial position can never dominate a record of showing up. Both designs reject plutocratic one-token-one-vote — but from opposite directions. Liquity removes the decisions so they cannot be captured; Caper keeps every decision on-chain and anchors it to earned, un-rentable stake, so a fixed rule set isn't needed to stay capture-resistant. Liquity's immutability-vs-adaptability tradeoff is the price of having no governance at all; Caper accepts governance and spends its effort making that governance hard to buy.