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  1. Home
  2. /Glossary
  3. /Protocol-Owned Liquidity
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defi

Protocol-Owned Liquidity

Liquidity that a protocol owns directly instead of renting it through yield farming incentives.

Definition

Liquidity that a protocol owns directly instead of renting it through yield farming incentives. Olympus DAO popularized this concept with its bonding mechanism, where users trade LP tokens for discounted protocol tokens. The idea is that owned liquidity is more sustainable than mercenary liquidity.

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Related Terms

Liquidity Pool

A pool of tokens locked in a smart contract that enables decentralized trading.

Liquidity Mining

Earning tokens by providing liquidity to a protocol.

Tokenomics

The economic design of a token including supply, distribution, utility, and incentives.

1inch

A DEX aggregator that splits trades across multiple decentralized exchanges to find the best overall price.

Aave

One of the biggest lending and borrowing protocols in DeFi.

Across Protocol

A cross-chain bridge that uses an optimistic verification system and a network of relayers to move tokens between chains quickly.

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