Protocol Owned Liquidity(POL)
As mentioned in the Sweet Protocol Economics section, a strategy of mercenary liquidity has developed within the DEFI space. Certain liquidity providers mine tokens, remove the liquidity, and dump the mined tokens.
Liquidity is the life and driving force for DEFI projects. Without liquidity DEFI projects are not very useful as market makers.
The long term solution for mercenary liquidity and the resulting low liquidity is not to depend on individuals to provide liquidity.
Through the use of smart contracts we are able to create code that can be the sole owner of liquidity. We call this Protocol Owned Liquidity or POL for short. This liquidity that is owned by the code/protocol will always be available to provide market making services.
The more POL the better, the assets that form the POL back the SWEET tokens giving the SWEET tokens value. The POL also ensures there is always liquidity in our trading pools to facilitate market operations.
Since the Sweet Protocol is a liquidity provider and the distributor of SWEET tokens through liquidity mining, it means that Sweet Protocol will be able mine its own token. This will allow the Sweet Protocol to collect more and more service fees. The fees collected end up as protocol owned liquidity while also increasing the backing of each SWEET token.