Decentralized finance (DeFi) platform Liquity is planning a protocol upgrade that includes a collateralized stablecoin using ether liquid staking tokens as collateral. This will allow users to set interest rates for loans, which is new in DeFi.

The new stablecoin, BOLD, will co-exist with Liquity's LUSD, adding liquid staking ETH derivatives as collateral assets to provide liquidity or leverage to investors.

Liquity plans to launch the protocol at the end of the third quarter of this year.