😋Protocol Owned Liquidity

The way Paradise can ensure that the liquidity of each PARA token is permanently guaranteed is that the protocol owns its liquidity.

The Paradise protocol invented a new type of AMM (Automated Market Maker) that encodes the floor price of a PARA into its pricing function. This AMM guarantees that it will not buy a PARA at a price below the floor price, and therefore ensures that there is at least enough liquidity for the PARA to be sold back at the floor price.

This Protocol Owned Liquidity (POL) is connected to PARA's central mint. POL is authorised to mint and destroy PARA tokens. Importantly, there is no pool of PARA tokens waiting to be purchased in the POL. This pool of unused PARA tokens requires that there be liquidity associated with the reserve price of each unused token in the pool.

Instead of locking unused PARA tokens in a traditional AMM pool, Paradise's POL holds virtual PARA. Each time a new PARA is purchased, the POL mints PARA tokens in a timely manner. When the holder of the PARA sells it back to the POL, the PARA tokens are burned and removed from the supply.