What is Liquity?

Liquity is a decentralized borrowing protocol built on the Ethereum blockchain that enables users to obtain interest-free loans using Ether (ETH) as collateral. Loans are issued in the form of LUSD, a U.S. dollar–pegged stablecoin backed by over-collateralized ETH positions. The protocol maintains stability through an automated liquidation mechanism that helps preserve system solvency when collateral values fall below required thresholds. Unlike traditional lending systems, Liquity operates entirely without governance, relying on immutable smart contracts and algorithmic parameters to ensure transparency, efficiency, and decentralization.

What is LQTY?

The native token of the platform is LQTY, which operates on the Ethereum blockchain. LQTY serves as an incentive token within the Liquity ecosystem, primarily rewarding users who stake LQTY or provide liquidity to LUSD markets. Holders can stake LQTY to earn a share of the fees generated from loan issuance and redemptions. The token has a fixed supply of 100 million LQTY, with approximately 95.39 million LQTY currently in circulation at the time of this publication.

Risk Statement

Before trading any crypto assets it is important to understand the risks. This overview is a starting point for you to perform your own research prior to investing in a crypto asset. 

No securities regulatory authority or regulator in Canada has evaluated or endorsed the Crypto Contracts or any of the crypto assets made available through the platform. 

Wealthsimple has performed an assessment of whether LQTY can be supported by Wealthsimple’s platform, including whether LQTY is a security and/or a derivative and is being offered in compliance with securities and derivatives laws.

We evaluated LQTY based on publicly available information, including (but not limited to):

• The creation, governance, usage and design of LQTY, including the source code, security and roadmap for growth in the developer community and, if applicable, the background of the developer(s) that first created LQTY;
• The supply, demand, maturity, utility and liquidity of LQTY;
• Material technical risks associated with LQTY, including any code defects, security breaches and other threats concerning LQTY and its supporting blockchain (such as the susceptibility to hacking and impact of forking), or the practices and protocols that apply to them;
• Legal and regulatory risks associated with LQTY, including any pending, potential, or prior civil, regulatory, criminal, or enforcement action relating to the issuance, distribution, or use of LQTY; and
• Statements made by regulators or securities regulatory authorities in Canada and other jurisdiction regarding whether LQTY, or generally about whether the type of crypto asset, is a security and/or a derivative.

Wealthsimple monitors ongoing developments related to crypto assets available on its platform for significant changes that may affect Wealthsimple’s original assessment of those assets, including Wealthsimple’s assessment of the application of securities and derivatives laws. Any significant changes relating to LQTY may result in changes to this Crypto Asset Statement and/or Wealthsimple’s ability to support LQTY.

Like all other crypto assets, there are some general risks to investing in LQTY. These include short history risk, volatility risk, liquidity risk, demand risk, forking risk, cryptography risk, regulatory risk, concentration risk, electronic trading risk and cyber security risk. Please review the Wealthsimple Crypto Product Risk Disclosure for additional discussion of general risks associated with the crypto assets made available through the platform.

We emphasize that this Crypto Asset Statement is not exhaustive of all risks associated with trading LQTY. Investors should perform their own assessment to determine the appropriate level of risk for their personal circumstances.

Wealthsimple is offering Crypto Contracts in reliance on a prospectus exemption contained in the exemptive relief decision Re Wealthsimple Investments Inc. dated December 18, 2023 (the Decision). 

The statutory rights of action for damages and rescission in section 130.1 of the Securities Act (Ontario), and, if applicable, similar statutory rights under securities legislation of other jurisdictions of Canada, do not apply in respect of this Crypto Asset Statement to the extent a Crypto Contract is distributed under the prospectus relief in the Decision.

Last updated: October 15, 2025