PDLP (Protocol-Direct-Liquidity-Provision) & POO (Protocol-Owned-Operator)
Protocol controlled liquidity is a module that allows the protocol to own and control the majority of protocol and treasury assets (i.e., USX, EUX, DF, etc) in the open market. It offers several advantages:
- Maximize liquidity and improve capital efficiency - it combats liquidity shortage of USX / EUX effectively by adding or removing protocol owned liquidity in response to market demands.
- Significantly reduce DF inflation by cutting off subsidies on rented liquidity.
- Now the protocol owns the majority of DF liquidity in DEXes (i.e., DF/USX pairs), which helps the protocol to generate more revenue from LP fees.