What Is the Concept of 'Protocol Owned Liquidity' (POL) and Its Impact on TVL Stability? ▴ Learn

What Is the Concept of ‘Protocol Owned Liquidity’ (POL) and Its Impact on TVL Stability?

Protocol Owned Liquidity (POL) is the liquidity that the protocol itself owns and controls, rather than relying on external, mercenary liquidity providers. POL is crucial for TVL stability because it is 'sticky' ▴ it cannot be withdrawn by external users.

By owning its liquidity, the protocol reduces its reliance on high, inflationary incentives and ensures a stable trading environment, which supports a more reliable and higher intrinsic valuation.

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