LQTY has a hard cap of 100 million tokens and roughly 98.8 million of them were already circulating as of August 2026, which puts Liquity's token in a category almost no DeFi asset occupies: fully distributed, with no meaningful unlock schedule left to absorb. There is no emissions program, no inflation, and no treasury drip. Whatever the token is worth has to come from demand rather than from a shrinking supply of sellers.
That structure was set in April 2021 and has never changed, because the contracts governing it cannot be changed. Understanding LQTY means understanding two things: how the original 100 million were split, and what a holder is actually entitled to today.
Where the 100 Million Tokens Went
The launch allocation was published before deployment and executed exactly as written, with lockups and vesting encoded rather than promised.
| Allocation | Share | Detail |
|---|---|---|
| Liquity community | 35.3% | 32M to the Stability Pool rewards pool, 2M community reserve, 1.33M to early LUSD:ETH liquidity providers |
| Early investors | 33.9% | 33,902,679 LQTY, one-year lockup from launch |
| Team and advisors | 23.7% | 23,664,633 LQTY, one-year lockup, then quarter vesting and monthly thereafter |
| Liquity AG endowment | 6.1% | 6,063,988 LQTY for company operations, one-year lockup |
| Service providers | 1.0% | Allocated to launch-stage service partners |
Source: Liquity's published launch details.
The 32 million community rewards pool was the interesting piece. It paid LQTY to people who deposited LUSD into the Stability Pool and to the frontend operators who routed them there, on a decaying curve designed to front-load early participation. That emission has long since run down, which is why circulating supply now sits within about 1% of the cap.
How LQTY Captures Value
A staked LQTY position earns from two separate sources, and they work differently enough that conflating them produces bad valuation math.
The first is Liquity V1. Every LUSD borrowed or redeemed on the original protocol pays a one-off fee, and those fees flow to LQTY stakers in LUSD and ETH. V1 still holds more collateral than V2 does, because its borrowers pay no recurring interest and have no reason to leave, so this stream is smaller than it once was but has proven durable.
The second is Liquity V2's Protocol Incentivized Liquidity budget. V2 borrowers pay interest continuously in BOLD, and that revenue splits on a hard-coded 75/25 ratio: three quarters to Stability Pool depositors, one quarter to PIL. Stakers do not receive that quarter directly. They vote on where it goes, weekly, allocating it to on-chain addresses called initiatives. The mechanism will feel familiar to anyone who followed the Curve wars, because the same competitive dynamic applies: projects that want the incentives court the voters who control them, and some pay for votes outright.
That indirect claim is what makes LQTY awkward to value on a multiple. Direct cash flow to stakers comes from a legacy protocol, while the growth asset is influence over a budget rather than a share of it. Anyone modelling LQTY's price outlook has to price both streams separately, and the second one only scales if the BOLD debt book does.
The Staking Trade-off
Voting power in V2 is not proportional to stake alone. It equals staked LQTY multiplied by staking age, growing linearly for as long as the position sits untouched. Adding to a stake starts the new tokens at zero voting power, which blocks flash-loan capture of a weekly vote. Withdrawing wipes the accumulated age entirely.
The practical effect is a soft lockup with no contractual lockup. Nothing stops a holder unstaking at any moment, and Liquity's own documentation is explicit that there is no lock period. What stops them is the cost of throwing away months of compounding influence, which becomes more expensive the longer they have held. Long-term stakers accumulate disproportionate control over the incentive budget, and that concentration is a design choice rather than an accident.
For a token with a fixed supply and no emissions, this is the closest thing LQTY has to a supply sink. Staked tokens are still liquid on paper, but the incentive to leave them alone is real and it strengthens over time.
Frequently Asked Questions
How many LQTY tokens are in circulation?
Roughly 98.8 million LQTY circulate as of August 2026 against a hard cap of 100 million, according to CoinGecko. That places circulating supply at about 99% of maximum supply, with fewer than a million tokens still locked. Fully diluted valuation and market cap are therefore nearly identical.
Does LQTY have inflation?
No. LQTY has a fixed 100 million supply with no ongoing emissions and no minting function available to any party. The only distribution mechanism was the original Stability Pool rewards curve, which has effectively run its course. New LQTY cannot be created.
What do you get for staking LQTY?
Staked LQTY earns LUSD and ETH from Liquity V1 borrowing and redemption fees, plus weekly voting power over the 25% of V2 interest revenue routed to Protocol Incentivized Liquidity. Voters may also receive payments from projects competing for that budget. Rewards accrue without any lockup period.
What a Fully Distributed Supply Means for LQTY
Most DeFi tokens carry a multi-year overhang of team and investor unlocks that quietly caps price for years. LQTY cleared that in 2022, and the fixed supply removes the other common drag, which is a treasury minting tokens to fund operations. What remains is a token whose price is a straight function of how much people borrow through Liquity and how valuable it becomes to control where the resulting incentives land.
That is a narrow thesis with no hedge inside it. Holders are betting on borrowing demand for an immutable dollar, and the tokenomics offer nothing to soften a period where that demand does not arrive.
Traders can access LQTY spot markets or take leveraged exposure through LQTY perpetual futures on LeveX. Browse Crypto in a Minute for more token breakdowns.