Liquidity Modules

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.

In an early post, we shared our ideas with the dForce community on the two forms of liquidity operation to be adopted - PDLP vs POO. Now let's walk you through the details:​

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