Two-Token Model

Liquid Finance’s architecture rests on a two-token design that distinguishes governance authority from capital participation.

LIQUID Governance Token

Fee Revenue

LIQUID token holders receive a share of protocol-level fees, including origination charges, net interest margins, and refinancing costs. Because the token directly accrues these earnings, its value is closely tied to the protocol’s economic performance.

Voting Rights

Holders of the LIQUID token can propose and vote on protocol-wide parameters such as fee rates, collateralization thresholds, or the launch of new lending pools. This governance model provides the community with a voice in how Liquid Finance evolves, ensuring that changes reflect a broader consensus of stakeholders.

Emission & Distribution

LIQUID tokens are allocated among early backers, ecosystem incentives, and the founding team, aligning long-term incentives for community members who contribute to the protocol’s growth. This distribution strategy promotes active participation in governance and encourages sustainable expansion of the Liquid ecosystem.

Pool-Specific dripTokens

Capital Deposits

Each lending pool within Liquid issues a unique deposit token, referred to as a dripToken, that directly corresponds to the specific characteristics and strategy of that pool. These pools may vary by factors such as geographic region, asset type, capital stack position, and risk profile. When investors deposit stablecoins or other eligible assets into a pool, they are issued dripTokens proportional to their contribution. These tokens not only represent the investor’s share of the pool but also accrue value over time through borrower repayments, interest income, and BTC appreciation tied to the pool’s collateral structure.

Principal + Yield Accrual

As borrowers repay loans with interest, and as the portion of BTC collateral in the pool appreciates, the value of each dripToken increases accordingly. dripToken holders can redeem their tokens for a share of the pool’s underlying assets—both stablecoins and BTC—reflecting the accrued principal and yield.

Market Liquidity

dripTokens are designed to be transferable and compatible with on-chain trading solutions, such as Automated Market Makers (AMMs). By listing dripTokens on secondary markets, investors can enter or exit positions more easily, creating a fluid marketplace for real estate-backed debt instruments.

Why Two Tokens?

By separating governance and deposit tokens, Liquid Finance maintains a clear distinction between protocol decision-making and the economic flows tied to individual lending pools. LIQUID token holders steer the overall direction of the platform and receive a share of its total fee revenue, while dripToken holders focus on the performance of specific lending pools. This division ensures that governance decisions remain aligned with the protocol’s collective well-being, and that capital providers retain transparent, direct access to the yields generated by their investment choices.