# Protocol Owned Liquidity

Protocol Owned Liquidity (POL) is all about the protocol taking control of its own liquidity instead of renting it from outsiders. In most DeFi systems, liquidity comes from external providers who chase incentives, but the moment rewards dry up, that liquidity can disappear overnight.

With POL, the protocol itself owns the liquidity pools, meaning it doesn’t need to beg or bribe mercenary capital to stick around.

<figure><img src="https://2474767537-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FH7HGQ6IOR0Yub9C0ugk0%2Fuploads%2F9gQHVh3nzcUgMevqzYyG%2Fimage.png?alt=media&#x26;token=e9669560-88e9-4b08-b037-ddc498c00493" alt=""><figcaption><p><a href="https://rezerve.money/risk">https://rezerve.money/risk</a> The liquidity tab in the risk page gives a full breakdown of the various assets and pools that the protocol owns liquidity with</p></figcaption></figure>

## Why Should the Protocol Own Liquidity?

In short, when the protocol owns liquidity, it owns its future by building stability, sustainability, and resilience that benefit every holder.

1. **Long-term commitment:** When the protocol owns its own liquidity, it no longer has to rely on “rented” capital that disappears the moment incentives dry up. Instead, it creates permanent liquidity that users can always count on. This makes the system far more trustworthy, because markets stay liquid and functional regardless of external conditions.
2. **Revenue**: On top of stability, protocol-owned liquidity is a source of revenue. By holding LP tokens directly, the protocol earns trading fees and yield instead of paying out unsustainable liquidity mining rewards. That income flows back into the treasury, creating a feedback loop that makes the protocol stronger over time.
