🌱Protocol Owned Liquidity
Permanent Liquidity That Compounds Over Time
How It Works
When liquidity providers (gentlemen) deposit assets to mint TEA tokens, a 4.9% fee is charged. This fee is permanently allocated to Protocol-Owned Liquidity (POL), which participates in the vault as a permanent LPer. Both the depositor's 95.1% and the POL's 4.9% earn trading fees from APE leverage positions.
POL never withdraws. It earns and compounds fees alongside other LPers, creating a growing liquidity floor that benefits everyone:
For traders: Reliable liquidity depth that keeps the convex zone wide
For LPers: A stable base that dampens liquidity shocks
For the protocol: Reduced reliance on inflationary incentives over time
The Growth Cycle
Users deposit liquidity → 4.9% goes to POL
POL earns fees → its share grows
Deeper liquidity → better trading experience (wider convex zone)
More traders → higher fee generation
Higher yields → attracts more liquidity
As POL compounds over time, it becomes the bedrock of the protocol — a permanent, growing foundation that ensures perpetual operation regardless of market conditions.
Comparison to Traditional Models
Traditional liquidity mining pays protocols to rent temporary liquidity — high ongoing costs, mercenary capital that leaves when rewards decrease, and unsustainable token inflation. SIR's POL model flips this: a one-time contribution creates permanent value with zero ongoing costs.
MegaETH: On MegaETH, Protocol-Owned Liquidity is optional. LPs can opt out of the POL fee by locking their deposit for a period of time instead. This gives LPs flexibility — pay the fee for immediate withdrawability, or lock up and keep 100% of their deposit.
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