# Protocol-Owned Liquidity

**HOLI pool type:** Uniswap V4 full-range hook.

**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**. That 1% belongs to **protocol-owned liquidity**. **Developers take no cut of LP fees.** Fill and slippage affect trade price, not official NAV. Official NAV is **1× the external leg**. **Fixed by the hook.** A <Md expr="w" /> vote picks **which pools to open**, not this 0 / 1%. Do not mix with the SHYT **tax** **20%** to development. Detail: [Fee Structure](/treasury-mgmt/amm-fees). How those LPs are marked is [POL accounting](/nav/pol).

**POL:** continuous take-up along the curve, not a NAV desk. The Treasury is the **asset and liquidity hub**. Inside governance-approved scope it builds POL around **USDG, community assets, and tokenized RWA**. RWA enters as **LP external legs**, not idle inventory. Treasury assets and LP positions are **read and marked by the contracts automatically**. The dashboard **reads on-chain** and **auto-updates NAV**. Dashboard NAV is marked **external assets** over **external HOLI**.

House of Liquidity owns its pools. Depth is a Treasury position, not a rented LP program.

The layout is hub-and-spoke. **HOLI** is the hub. External assets are spokes. Each pool is Uniswap V4 full-range: independently priced <Md expr="X_j" /> vs HOLI.

## The spokes

* **SHYT/HOLI** — community meme against the hub. Held by the **House of Liquidity Treasury**; **part of project assets**; SHYT counts in NAV at **1×**. Do not 2× the LP.
* **USDG/HOLI** — stablecoin against the hub
* **Stock/HOLI** — tokenized stocks and other eligible RWAs against the hub. RWA enters as this **LP external leg**, not idle inventory.

The protocol holds **no StockA/StockB** direct LPs. Two external assets do not pair directly inside the house. It prices through **each external-asset/HOLI pool** and converts to **USDG**. There is always trading demand among Stock Tokens, RWA, and stables. If two **HOLI-routed** relative prices differ by more than **transaction costs**, arbitrageurs buy the cheap asset and sell the rich one until relative prices across pools **reconverge**. Therefore, under normal market conditions, on-chain prices are auto-calibrated by continuous trading and arbitrage; they do not need a manager's manual valuation. Detail: [Price Sources](/nav/prices).

## Continuous take-up, productive reserve

An external-asset/HOLI LP is not only a line on the Treasury report. It is a **continuously running take-up**: convertibility in the **market-liquidity** sense, already in the market.

When a holder sells HOLI into the pool, the Uniswap V4 **full-range hook** takes HOLI, deducts the **1% exit fee**, and releases the external asset to the holder.

Because those LP shares are protocol-owned, this is the protocol **continuously taking the other side of HOLI via pre-deployed liquidity**. It does not wait for price below NAV to fire a **discrete buyback**.

That take-up is **not** a promise to redeem HOLI at a **fixed NAV**, a **fixed price**, or **unlimited size**. External assets actually received depend on **pool depth**, the **full-range curve**, the **then-current reserve mix**, the **1% exit fee**, and **slippage**. A below-NAV buyback via a [w vote](/staking/rights) is a separate, optional discrete path. See [NAV ≠ Redemption](/nav/redemption).

The same mechanism is **productive**. Swaps through protocol-owned LP generate fees. The 1% is an **LP fee** and counts as protocol assets: it **automatically accrues in the LP** **or** is **auto-collected to the Treasury by the contract**. It belongs to **protocol-owned liquidity**. **Developers take no cut of LP fees.**

## One LP, four jobs

The same reserve capital does four jobs at once:

* **Support HOLI NAV.** The external-asset side is Treasury collateral in the market. It is the backing in the dashboard print.
* **On-chain exit channel.** Selling HOLI into the pool is how a holder leaves. The pool takes HOLI and releases USDG, a stock token, or another spoke asset along the curve.
* **Cross-asset routing infrastructure.** The same pools are the routing layer between SHYT, USDG, and RWAs.
* **Fee income.** **HOLI pool fees:** buy HOLI **0**; sell HOLI **1% exit fee**, as **LP fee**. Fees **automatically accrue in the LP** **or** are **auto-collected to the Treasury by the contract**. Belongs to **POL**. **Developers take no cut.**

**Liquidity fees and other Treasury income recycle into the protocol and fund the next round of asset and liquidity growth.** That is a [design goal](/flywheel). It does not guarantee volume, yield, or price.

How inflows reach these pools is on [Capital Flows](/capital-flows). How USDG becomes Stock/HOLI is [POL Deployment](/treasury-mgmt/deployment).