Historical bad-debt events

Liquity V1 + V2 (LUSD / BOLD)'s assessment for RD-F-067 — scored green on the v1.7.0 rubric. The evidence below is the curator's reasoning for this score.

Evidence summary #

v1: Zero bad debt in 4+ years of live operation. May 2021 stress test (ETH $3,400→$1,800, ~300 troves liquidated): Stability Pool absorbed all defaulted debt, no socialized losses. Q1 2022: 12,225 ETH + 147 troves liquidated, no bad debt, never entered Recovery Mode. Rekt leaderboard: empty for Liquity. v2: Launched May 2025, no bad debt events in ~12 months live. Pre-launch Feb 2025 vulnerability was zero-loss (discovered before users at risk).

Sources #

URL
How Liquity Handled its First Big Stress TestMay 2021 stress test: Stability Pool absorbed all liquidated debt, no losses to systemretrieved 2026-05-16
Internal
Liquity data cache — hacks field empty00-data-cache.json sources.defillama.hacks = [] (empty); Rekt leaderboard no incidentsretrieved 2026-05-16
URL
Liquity Q1 2022 ReportQ1 2022 report: second-largest liquidation volume, never entered Recovery Mode, no bad debtretrieved 2026-05-16

Methodology #

Count and sum (USD) the number of documented bad-debt events where the protocol socialized losses across depositors.

See the full factor methodology and distribution across all protocols →

rubric_version v1.7.0 protocol liquity factor RD-F-067 score green collected_at 2026-05-16 10:35:50