Protocol-Owned Liquidity

Instead of relying entirely on external liquidity providers, a portion of trading fees is used to grow permanent, protocol-controlled liquidity over time.

Base Swap Fee

Each trade includes a 0.20% fee:

• 0.17% → Liquidity Providers (LPs)

• 0.03% → Treasury Vault (POL engine)

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What This Means

• LPs earn consistent swap fees

• the protocol accumulates value

• liquidity becomes increasingly protocol-controlled

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How POL Works

The Treasury Vault:

• collects the 0.03% fee share

• accumulates assets over time

• buys XPGN from the market

• pairs it with assets (e.g. USDT / BNB)

• creates liquidity positions

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👉 These LP tokens are:

• owned by the protocol

• not withdrawable by external users

• managed through governance

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Result

Paragon progressively becomes its own liquidity provider, strengthening its markets over time.

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Why POL Matters

📈 Stronger Token Support

• continuous XPGN buy pressure

• protocol-aligned demand

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💧 Deeper Liquidity

• permanent LP positions

• reduced reliance on short-term liquidity

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🛡️ Market Stability

• improved execution during volatility

• tighter spreads

• reduced slippage

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🔁 Flywheel Effect

More volume → more fees → more XPGN buybacks → more POL → better execution → more volume

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Treasury Vault

The Treasury serves two core functions:

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1. Liquidity Engine (POL)

• builds and maintains protocol-owned liquidity

• manages LP positions

• adjusts allocations over time

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2. Protocol Support Layer

• supports core protocol operations

• funds ecosystem development

• enables long-term system growth

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👉 All treasury activity is governed on-chain.

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Governance (veXPGN)

POL decisions are controlled by:

• veXPGN holders

• DAO proposals

• timelocked execution

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Governance can adjust:

• buyback cadence

• liquidity allocation

• treasury parameters

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Transparency

All treasury activity is:

• on-chain

• auditable

• publicly verifiable

Future dashboards will display:

• fees collected

• XPGN buybacks

• POL positions

• treasury balances

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Key Notes

• POL does not replace external liquidity

• LPs continue to earn standard swap fees

• protocol behavior is designed around accumulation, not distribution

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Current Parameters (Testnet)

• base fee: 0.20%

• LP share: 0.17%

• treasury (POL): 0.03%

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FAQ

Does POL compete with LPs? No. LPs earn fees from trading activity, while POL strengthens long-term liquidity.

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Where does XPGN demand come from?

• trading fees

• treasury buybacks

• ecosystem activity

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Can POL be changed? Yes — through governance.

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Summary

Protocol-Owned Liquidity enables:

• permanent liquidity growth

• sustained token demand

• stronger execution conditions

POL transforms Paragon into a system that continuously reinvests trading activity into its own liquidity base.