Introduction

Please read this Disclaimer carefully before accessing, interacting with, or using the Liquity Protocol V1 and/or V2 software, consisting of the Liquity Protocol V1 and V2 technology stack (in particular its smart contracts as well as related smart contracts such as e.g. the looping automation smart contract, delegation smart contract etc.; “Liquity Protocol Software”) as well as any other Liquity technology such as e.g., the launch kit for frontend operators (for Liquity Protocol V1 and V2), any tooling software, data analytics as well as the incentive modules for Liquity Protocol V2 (if developed and deployed by Liquity AG) etc.  (together with the Liquity Protocol Software the “Liquity Technology”). 

This disclaimer relates to the use of the Liquity Protocol Software as well as Liquity Technology in general. The Liquity Protocol Software enables its users (“User”) to create liquidity in LUSD respectively BOLD in a fully decentralized and autonomous manner, using the immutable smart contracts of the Liquity Protocol Software.

Via the Liquity Protocol V1 software interest-free liquidity in LUSD (a technically USD pegged stablecoin) can be created by depositing ETH as technical collateral towards autonomous smart contracts. A fully decentralized liquidation mechanism incl. a stability pool aims to ensure that LUSD remains backed by sufficient collateral. For the use of the functions of the respective smart contracts related to the Liquity Protocol V1 software, the involved smart contracts automatically and autonomously deduct technical fees which can be claimed by the LQTY holders (if any). 

Via the Liquity Protocol V2 software liquidity in BOLD (a technically USD pegged stablecoin) can be created by depositing ETH or some other pre-defined liquid staking tokens of ETH (“LST”) as technical collateral towards autonomous smart contracts.  A fully decentralized liquidation mechanism incl. a stability pool aims to ensure that BOLD remains backed by sufficient collateral. For the use of the functions of the respective smart contracts related to the Liquity Protocol V2 software, the involved smart contracts automatically and autonomously deduct technical fees (if any) which are allocated to the stability pool function to incentivize stability providers (75%), as well as to the incentive pool function (25%). The technical fees allocated to the incentive pool function then are being distributed again in a fully autonomous and decentralized manner via incentive modules as voted by the LQTY stakers in V2. The role of LQTY stakers in V2 is limited to influence directly on-chain the allocation to the incentive modules. The respective allocation can be changed by the LQTY stakers at any time and no LQTY holder or any other person can expect a certain allocation being made via an incentive module nor that even such incentive module is developed.

Any and all functionalities of the Liquity Protocol Software as well as the Liquity Technology in general are of purely technical nature and there is no claim towards any private individual or legal entity in this regard.

No Relationship to Liquity AG / Usage of Liquity Protocol Software, respectively Liquity Technology at Own Risk

While Liquity AG developed the Liquity Protocol Software as well as the Liquity Technology, the Liquity Protocol Software runs in a fully decentralized and autonomous manner on the Ethereum network. Liquity AG is neither involved nor in any way responsible for the operation, running or functioning of the Liquity Protocol Software, any other element of the Liquity Technology and/or any of the interactions, collaborations or factual relationships between Users and the smart contracts of the Liquity Protocol Software or any other elements of the Liquity Technology. Liquity AG has neither access to nor any other possibility to control and/or influence the corresponding transactions, deposits and/or allocations made by the Users and the involved smart contracts using the Liquity Protocol Software or any other elements of the Liquity Technology. Liquity AG does not run an own frontend, nor has it entered in any relationship towards the frontend operators or does control their activities in any form.

In particular, Liquity AG has not and will not enter into any legal or factual relationship with any User of the Liquity Protocol Software nor the Liquity Technology in general. CONSEQUENTLY, LIQUITY AG IS NOT LIABLE TO ANY USER FOR DAMAGES, INCLUDING ANY GENERAL, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES ARISING OUT OF THE USE, IN CONNECTION WITH THE USE OR INABILITY TO USE THE LIQUITY PROTOCOL SOFTWARE AND/OR THE LIQUITY TECHNOLOGY IN GENERAL (INCLUDING BUT NOT LIMITED TO LOSS OF ETH, LST, LUSD, BOLD OR LQTY, INSUFFICIENT BACKING OF LUSD AND/OR BOLD BY TECHNICAL COLLATERAL, DEPEG OF LUSD AND/OR BOLD, NON-ALLOCATION OF TECHNICAL FEES, LOSS OF DATA, BUSINESS INTERRUPTION, DATA BEING RENDERED INACCURATE OR LOSSES SUSTAINED BY A USER OR THIRD PARTIES AS A RESULT OF THE LIQUITY PROTOCOL SOFTWARE RESPECTIVELY OTHER ELEMENT OF THE LIQUITY TECHNOLOGY, ANY ACTIVITY OF A FRONTEND OPERATOR,  ANY FAILURE OF THE LIQUITY PROTOCOL SOFTWARE  RESPECTIVELY OTHER ELEMENT OF THE LIQUITY TECHNOLOGY TO OPERATE WITH ANY OTHER SOFTWARE OR ANY INACCURATE OR MISLEADING ANALYTICS AND AGGREGATION DATA PROVIDED BY A WEBSITE OR API).

The Liquity Protocol Software elements related to V1 have been published by Liquity AG under the MIT license, which forms an integral part of this Disclaimer. 

The Liquity Protocol Software elements related to V2 have been published by Liquity AG under the Business Source License (BSL) (core code) and the MIT license (governance components) which both form an integral part of this Disclaimer. 

As the Liquity Protocol Software as well as any other element of the Liquity Technology is of experimental nature it may contain bugs, defects, or errors (including any bug, defect, or error relating to or resulting from the display, manipulation, processing, storage, transmission, or use of data) that may materially and adversely affect the use, functionality, or performance of the Liquity Protocol Software respectively the Liquity Technology or any product or system containing or used in conjunction with the Liquity Protocol Software, respectively the Liquity Technology. Any tooling and analytics software/APIs are solely meant for informational, testing and debugging purposes. Users are advised to use and run their own tooling and analytics solutions for their productive environment.

THE LIQUITY PROTOCOL SOFTWARE AS WELL AS ANY OTHER ELEMENT OF THE LIQUITY TECHNOLOGY (INCL. TOOLING SOFTWARE AND ANALYTICS DATA) HAS BEEN AND IS BEING PROVIDED "AS IS", WITHOUT WARRANTY OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO THE WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND NONINFRINGEMENT.

THE LIQUITY PROTOCOL SOFTWARE AS WELL AS ANY OTHER ELEMENT OF THE LIQUITY TECHNOLOGY IS HIGHLY EXPERIMENTAL AND ANY REAL ETH AND/OR LST AND/OR LUSD AND/OR BOLD AND/OR LQTY SENT, STAKED OR DEPOSITED TO THE LIQUITY PROTOCOL SOFTWARE ARE AT RISK OF BEING LOST INDEFINITELY, WITHOUT ANY KIND OF CONSIDERATION.

Further, as the Liquity Protocol Software is built on the Ethereum network its proper functioning is dependent on the Ethereum network and any transaction including ETH, LST, LUSD, BOLD or LQTY requires ETH as gas. 

No Endorsement of Third-Party Activity related to the Liquity Protocol Software Respectively Liquity Technology

There are no official frontend operators or delegators, and the use of any frontend or delegator is made by User at its own risk. To assess the trustworthiness of a frontend operator or delegator lies in the sole responsibility of the User and must be made carefully.

While Liquity AG might grant licenses to third-party projects to use the Liquity Protocol Software code related to V2 (core code), it is not involved into the development and deployment of such projects, nor in any other use of the Liquity Protocol Software whether permitted or not by anyone (“Third-Party Projects”). Any permission to use the Liquity Protocol Software or related license granted by Liquity AG is not to be considered an endorsement of the Third-Party Project and the use of any Third-Party Project software is made by User at its own risk. To assess the functionality, technical viability and/or trustworthiness of such Third-Party Project software lies in the sole responsibility of the User and must be made carefully.

Assumption of Risks of Cryptographic Token, Currencies and Systems

There are also general risks associated with purchasing, owning and using cryptographic Token (hereinafter “Token”) In order to access and make use of certain features of the Liquity Protocol Software, respectively Liquity Technology, a User may need Token (in particular, ETH, LST, LUSD, BOLD and/or LQTY). 

Token such as ETH, LST, LUSD, BOLD and LQTY are highly volatile due to many factors including but not limited to adoption, speculation, technology, and security risks. The cost of transacting on the Ethereum network or related blockchain technologies is variable and may increase at any time causing impact to any activities taking place on the Ethereum network. 

Even though the Liquity Protocol Software respectively Liquity Technology functionalities aim at stabilizing the value of LUSD and BOLD, there is no guarantee that these tokens are always backed by sufficient technical collateral, respectively do not depeg due to malfunctions of the Liquity Protocol Software respectively Liquity Technology, price oracle failure, loss of value of technical collateral etc. 

User is solely responsible for transacting and holding Token like ETH, LST, LUSD, BOLD and/or LQTY while accessing and/or interacting with the Liquity Protocol Software respectively Liquity Technology. 

Neither LUSD, BOLD nor LQTY do represent or constitute any ownership rights or stake, shares or security or equivalent rights nor any rights to receive future revenues or shares or any other form of participation or governance rights in or relating to any private individual or legal entity. In particular, LUSD, BOLD and LQTY do not represent or confer any ownership right or stake, share, security, or equivalent rights, or any right to receive future revenue shares, intellectual property rights or any other form of participation in or relating to any private individual or legal entity. 

User is responsible for implementing reasonable measures for securing the wallet, vault or other storage mechanism used to receive and hold ETH, LST, LUSD, BOLD and LQTY or any other Token, including any requisite private key(s) or other credentials necessary to access such storage mechanism(s). If User’s private key(s) or other access credentials are lost, User may lose access to its Token. 

Risk of Regulatory Actions and Compliance with Laws

The Liquity Protocol Software respectively Liquity Technology could be impacted by one or more regulatory inquiries or regulatory actions, which could impede or limit User’s ability to access or use the Liquity Protocol Software respectively Liquity Technology.

User is solely responsible for complying with applicable law when interacting (in particular, when using ETH, LST, LUSD, BOLD, LQTY or other Token) with the Liquity Protocol Software respectively Liquity Technology whatsoever.