Sphynx Labs

How Can Sphynx Labs Benefit From a POL Model

The biggest benefit of the POL model is the potential to accumulate a massive amount of LP tokens that are permanently locked in a smart contract and guaranteed not to leave the protocol treasury. Not only is this highly profitable for the protocol, but by permanently locking tokens in liquidity, a POL model is able to guarantee minimal price slippage as well as maximize price stability for the protocol’s token.
As in the previously mentioned example, Olympus is known to possess over 99% of their own $OHM-$DAI liquidity. With such a vast share of the liquidity pool Olympus captures nearly all the trading fees that occur when investors buy or sell the $OHM token. This very fact serves as a powerful revenue stream for the Olympus protocol. What about the Olympus users? How do they win? Well, not only can investors purchase the $OHM token at a discount and maximize their holdings or perform arbitrage, but they also get the comfort of knowing that they will be able to sell their holdings with minimal price slippage at any time because the strength of the Olympus treasury guarantees the presence of a high degree of available liquidity.