Liquity Protocol Sees $17 Million Outflows After Advising Users to Exit v2 Stability Pools

Liquity, an Ethereum-based decentralized borrowing protocol, experienced over $17 million in outflows within 24 hours after recommending users to exit positions from its newly launched Liquity v2 Stability Pools. The protocol announced an investigation into potential issues with its v2 earn pools on Feb. 12, but assured users that all trade operations, including redemption of Bold (BOLD) tokens, withdrawal of collateral assets, and staking services, were unaffected. Despite the outflows, Liquity v1 did not show any impact in terms of investment outflows. Liquity v2, which includes Rocket Pool ETH (RETH), Wrapped Ether (WETH), and Wrapped Lido Staked Ether (WSTETH) tokens, saw significant outflows, with WSTETH leading at $11.3 million.