What Is ‘Protocol Owned Liquidity’ (POL) and How Is It Governed?
Protocol Owned Liquidity (POL) is the liquidity in a decentralized exchange's (DEX) pool that is owned and managed by the protocol's DAO treasury, rather than being rented from individual liquidity providers. This ensures the protocol always has deep liquidity for its token, reducing reliance on external incentives and improving market stability.
POL is governed by the token holders through the standard DAO voting process. Proposals determine how much treasury capital is allocated to POL, which trading pairs are used, and how the accrued trading fees are reinvested or used.