> For the complete documentation index, see [llms.txt](https://the-heist-1.gitbook.io/the-heist-docs/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://the-heist-1.gitbook.io/the-heist-docs/how-it-works/protocol-owned-liquidity.md). # Phase 7 — Protocol-Owned Liquidity Rented liquidity leaves. Someone providing liquidity purely for the best yield has every reason to pull it the moment a better opportunity shows up somewhere else — and a protocol that depends on that liquidity sticking around is one bad week away from a crisis. The Heist solves this by owning a chunk of its own liquidity outright, permanently, funded automatically by its own trading activity — no third party required, and nothing that can walk away. ## Where this liquidity comes from ```mermaid flowchart TD A[0.15% fee on every trade] --> C[Builder contract] B[Share of the Printer's\nexpansion sales] --> C C --> D[Swaps roughly half\nof what it's holding] D --> E[Deposits the matched pair\ninto the liquidity vault] E --> F[Shares credited to\nthe treasury multisig] F --> G[Protocol's own liquidity\ngrows a little more] ``` The funding side is fully automatic, with no one needing to do anything: a tiny slice of every trade (0.15%), plus part of the proceeds whenever the [Printer](/the-heist-docs/how-it-works/the-peg-and-the-printer.md) sells off an expansion, both land in a builder contract on their own. Turning that into actual liquidity is a separate, permissionless step anyone can trigger — it swaps roughly half of what the contract is holding so it ends up with a matched pair of both tokens, then deposits that pair into the same liquidity vault anyone else can deposit into (see below), crediting the resulting shares to the treasury multisig. To be precise about what's actually guaranteed here: the builder contract itself has no owner path to redirect this money anywhere else before it becomes liquidity — that part is enforced by code. Whether the treasury ever withdraws its resulting shares afterward is a policy commitment the multisig honors, the same as any other depositor could choose to withdraw theirs — nothing in the contract physically locks them in place. In practice that money exists purely to make the market LOOT trades in deeper, permanently, not to be managed for any other purpose. ## You can become a liquidity provider too The vault the protocol deposits into isn't protocol-only — anyone can put liquidity into the exact same pool, the exact same way. Here's how: 1. Go to the **Trade** page and switch to the **Create Liquidity** tab (next to Swap). 2. Deposit a matched pair — some LOOT and some WETH (or MERRY and WETH, for that pool). 3. You'll get a share token back representing your slice of the position (`vLOOT-WETH` or `vMERRY-WETH`). This already earns you a cut of ordinary trading fees. 4. Optionally, take that share token to the **Farms** page and stake it there for MERRY rewards on top — see [Gauge Farms & Voting](/the-heist-docs/how-it-works/gauge-farms-and-voting.md) for that second step. Just like the protocol's own shares, yours are never locked — withdraw whenever you want, for your proportional share of the underlying tokens plus whatever fees have piled up. The position itself covers the **entire possible price range**, not just prices near today's — so it never stops earning fees just because the price moved. That trades away a bit of theoretical efficiency for something much simpler to reason about and much harder to break, which is the same trade-off this protocol makes everywhere else. ## MERRY has its own vault too, seeded by hand MERRY/WETH gets its own liquidity vault and its own share token (`vMERRY-WETH`), built the exact same way as the LOOT/WETH one above — so MERRY has a real home market instead of hoping a third party bothers to create one. What it doesn't have is an automatic builder feeding it: the MERRY/WETH pool has no peg to defend, so it charges a plain trading fee with no extra tax logic, and no fee slice or Printer split routes anything into growing it automatically. The treasury multisig seeds this one directly, by hand, whenever it chooses to. ## Why this keeps compounding Every single trade, in either direction, at any price, feeds a little more into this. More liquidity means trades move the price less, which makes trading more attractive, which brings more volume, which feeds even more back in — a loop that reinforces itself. Unlike a rewards program that pays people to show up and eventually runs out of budget, this one never expires: it keeps running for as long as there's any trading happening at all. Next: [The Treasury](/the-heist-docs/how-it-works/the-treasury.md) — where the protocol's other revenue gets collected and handed out. --- # Agent Instructions This documentation is published with GitBook. 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