# Flywheel

After Genesis completes, the HOLI flywheel starts. The earlier chapters named the parts. This chapter is the economic thesis: how those parts feed each other. No identities here.

The mechanism is live after Genesis. [Premium issuance](/supply/premium) and staking inflation still wait out the [7-day quiet period](/launch/quiet-period) — that week pauses those two only. Forming pools, mint-to-swap, the green channel, and the team management mint **still run on their own rules**. After that week, <Md expr="w" /> votes whether inflation is on, per-period size, and interval. Even if that proposal passes, issuance opens to staking-rule-eligible addresses only when <Md expr="\pi_t > 45\%" />.

## Treasury Growth

**Premium issuance**
→ **undeployed basket**

After the quiet period, <Md expr="w" /> sets whether inflation is on, per-period size, and interval. Even if that proposal passes, issuance opens only when HOLI's premium vs NAV is above **45%**, to addresses that meet the staking rules. The quote auto-reads HOLI/USDG. This period's inflation mint is credited to eligible staking wallets by [effective weight](/staking/allocation). They pay **USDG** at **69%** of that **market** price to mint. If market premium falls back to **45% or below**, or proceeds do not fully enter the Treasury, pause issuance; unused credits **expire** and cannot mint. New HOLI is immediately transferable, sellable, and re-stakeable. That USDG goes into Treasury **undeployed reserves**, in full. Assets rise with supply.

At the gate the print is sized not to dilute NAV. Well above 45%, NAV per token thickens. Either way, the house is larger in asset terms than it was before the mint.

Genesis fills the opening Treasury once. SHYT tax is not launch-only: **5%**, **80% Treasury / 20% development**, for the life of the tax. Premium issuance is the standing USDG inflation path after HOLI is live. The SHYT [green channel](/launch/green-channel) is a parallel path: pool price, paid in **SHYT**. The printer itself is [Premium Issuance](/supply/premium).

## Liquidity Growth

**Undeployed basket**
→ **POL**

A larger Treasury is not the product. Depth is. **Undeployed reserves after the HOLI/USDG deploy (i.e. after Genesis): about $100,000 USDG remaining.** **HOLI/Stock deployment:** only after **undeployed again > 30%** (or a **separate approval** to use reserves) **and** a <Md expr="w" /> vote passes the **specific name**, then swap into that stock and form the pool. Premium USDG sits undeployed. When undeployed assets are **again > 30%**, effective weight <Md expr="w" /> also votes to allocate idle funds into **already-approved** pools, toward deployed **> 70%** / undeployed **\< 30%**. Protocol-owned pools: SHYT/HOLI, USDG/HOLI, Stock/HOLI. The team may execute a **passed** vote. It cannot allocate idle funds without that vote (or a separate approval to use reserves).

The same dollars do four jobs once they are in a pool: reserve, exit, routing, and a fee asset. That is [Protocol-Owned Liquidity](/pol). How USDG becomes a Stock/HOLI book is [POL Deployment](/treasury-mgmt/deployment).

HOLI minted to pair the Treasury's side of a pool stays inside that LP. It is inventory to quote the spoke, not a sale onto the tape. Circulating supply does not jump just because the house put on more depth.

## Fee Growth

**POL**
→ **fees**
→ **Treasury growth**

Depth is only useful if people trade through it. Deeper POL may bring more trading and fees. **HOLI pool fees:** buy HOLI **0**; sell HOLI **1% exit fee**, as **LP fee**. That 1% counts as protocol assets. Fees **automatically accrue in the LP** **or** are **auto-collected to the Treasury by the contract**.

The 1% is an **LP fee**, not a skim to a team wallet, and not a second mint. Both destinations count as protocol assets. **Developers take no cut of LP fees.** Fee design is [Fee Structure](/treasury-mgmt/amm-fees).

**Liquidity fees and other Treasury income recycle into the protocol and fund the next round of asset and liquidity growth.** They are why POL is not just an exit channel.

## Network Effect

**More HOLI markets**
→ **better routing**
→ **more HOLI utility**
→ **deeper liquidity**

Each new spoke is not a separate island. The house does not pair StockA with StockB. Every admitted name meets the others through HOLI. One more Stock/HOLI pool makes every existing pool a better route: SHYT to a stock, USDG to a stock, stock to stock, all via the hub.

Better routing makes HOLI more useful as the common pair — the thing you hold or cross if you want the house's markets. More utility may bring more flow onto those books. More flow may pay more fees, fund more Treasury, and support more POL. Depth and usage are meant to pull on each other.

A larger Treasury can, after an idle-fund <Md expr="w" /> vote, deploy protocol-owned LP for more admitted tokenized RWAs. Deeper POL may bring more trading and fees; those fees accrue in the LP or are auto-collected to the Treasury, and count as protocol assets.

That is the whole thesis, in one line:

**Liquidity fees and other Treasury income recycle into the protocol and fund the next round of asset and liquidity growth.**

**More Treasury assets → more POL → more fees → Treasury grows further**

The flywheel is a design goal. It does not guarantee trading volume, yield, or token price.