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Glossary · P
Protocol-Owned Liquidity
Liquidity that is permanently owned by a protocol's treasury rather than rented from liquidity providers. Pioneered by OlympusDAO (2021), the concept emerged because protocols that pay high token emissions to attract LP liquidity face constant sell pressure on their tokens. Protocol-owned liquidity earns trading fees forever and cannot be withdrawn on a whim — making it more sustainable than incentivised liquidity.
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