# Treasury

The House of Liquidity Treasury holds the protocol's external reserves, protocol-owned LP positions, and the HOLI inventory needed to quote those pools.

This page defines what belongs to the Treasury. Where capital comes from is [Capital Flows](/capital-flows); how pools work is [Protocol-Owned Liquidity](/pol); and how every position is counted is [NAV & Accounting](/nav/definition).

Before HOLI is deployed, the Treasury share of SHYT tax revenue is held in a temporary safewallet and used to buy back SHYT. The custody address and Phase II transfer condition are [Phase I](/launch/phase-i) and [Official Links](/official-links).

## What the Treasury can hold

### External assets

* **SHYT**, including tax-funded buybacks accumulated during Phase I;
* **USDG**;
* governance-approved **tokenized stocks and other RWAs**;
* other approved external assets not yet deployed.

Admission, risk caps, and the requirement that approved names other than SHYT be blue chips are defined in [Asset Admission](/treasury-mgmt/admission).

### Protocol-owned liquidity

The Treasury owns external-asset/HOLI LP positions such as:

* SHYT/HOLI;
* USDG/HOLI;
* approved Stock/HOLI and other RWA/HOLI pools.

These are Treasury assets rather than temporary positions supplied by incentivized third-party LPs. Eligible RWAs normally enter the house as the external legs of these pools, not as a permanent pile of idle inventory.

Pool architecture, market exits, routing, and the HOLI sell burn are explained in [Protocol-Owned Liquidity](/pol). Pool valuation belongs to [NAV Definition & POL Accounting](/nav/definition#pol-accounting).

### Undeployed reserves

External assets not currently inside pools remain as allocation and risk-management capacity. The target split between deployed and undeployed assets is [Treasury Asset Buckets](/treasury-mgmt/buckets).

## Treasury-held HOLI

HOLI minted to form the protocol side of a pool is Treasury inventory. This includes HOLI inside protocol-owned LP positions.

It belongs to <Md expr="S_t^{\mathrm{treas}}" />, not external supply <Md expr="N_t" />. It is not treated as an external asset in the NAV numerator. Otherwise the protocol would count its own claim as both an asset and a share held by the market.

The canonical identity and the reason LPs are marked using only their external legs are [NAV Definition & POL Accounting](/nav/definition).

Untaxed staking emission is tracked separately as <Md expr="U_t" /> inside sHOLI. It is not Treasury LP inventory, and deposited staking principal is not subtracted from external supply. See [Seigniorage Tax](/supply/seigniorage-tax).