Liquidity Management
How the protocol ensures deep, stable markets
The Core Challenge
Traditional real estate takes months to sell. $USH trades in seconds. This transformation requires solving a fundamental equation: ensuring available liquidity always exceeds potential redemption demand.
Manifest balances this equation through two key mechanisms:
Liquidity provision: Creating deep markets for trading
Duration creation: Incentivizing longer holding periods to reduce redemption pressure
The Liquidity-Duration Balance
Understanding the Equation
At any moment, the protocol must balance:
Potential demand: All unstaked ("raw") $USH that could be sold immediately
Available liquidity: Protocol-owned liquidity (POL) + Investor-owned liquidity (IOL)
Example stable state:
30% raw $USH (potential sellers)
50% staked as $sUSH (28-day locked)
20% in LP positions (potentially incentivized)
Total liquidity: 20% POL + 20% IOL = 40%
Result: 40% liquidity can handle 30% potentially immediate redemptions.
Creating Duration
The protocol manages redemption demand by creating holding incentives:
$sUSH Staking: 28-day cooldown creates hard duration
Locks 50%+ of supply
Predictable unlock schedule
Rewards incentivize maintaining stakes
LP Positions: The points program creates soft duration
Daily points emissions reward continuous liquidity provision
Multipliers for longer commitments
This combination reduces the "raw" $USH that could demand immediate liquidity.
Protocol-Owned Liquidity (POL)
Foundation Layer
Manifest launches with ~20% of TVL as POL, providing:
Guaranteed market depth at NAV and continuous pricing across all ticks
Emergency redemption capacity
Market confidence
Scaling Dynamics
As the protocol matures:
$100M TVL: 20% POL ($20M) may be necessary
$1B TVL: 10% POL ($100M) will likely be sufficient
Natural efficiency gains as IOL grows
Investor-Owned Liquidity (IOL)
Incentive Structure
LPs earn through multiple layers:
Immediate returns:
Trading fees from all swaps
Points emissions for liquidity provision
Duration incentives:
Points multipliers for consistent provision
Bonus rates for maintained positions
Penalties for early withdrawal discourage mercenary capital
Bonus Token Rewards
Certain DEX pools may have additional token incentives for LPs from partner protocols.
Building Sustainable IOL
The protocol actively manages IOL growth:
Monitor depth relative to floating supply
Adjust point emissions based on needs
Deploy targeted campaigns during growth phases
Create long-term alignment through rewards
Liquidity Health Monitoring
Key Metrics
Real-time tracking ensures system health:
Liquidity coverage ratio: Total liquidity / Raw $USH
Depth at NAV: Available within 1% of fair value
Duration metrics: Average LP position age
Concentration: POL vs IOL balance
Emergency Provisions
Liquidity Cascade
If standard liquidity proves insufficient:
Yield enhancement: Reduced POL automatically increases $sUSH yields, attracting capital
Emergency incentives: Boost LP rewards to attract liquidity
HEI liquidation: Sell partial HEI portfolio into securitization markets or to traditional institutional buyers
Redemption vote: 60% of holders can trigger full liquidation of backing assets
See redemption options for detailed mechanisms.
Governance Tools
$USA holders can authorize:
Temporary of fees waiver (if fees activated)
Enhanced staking rewards
Institutional liquidity partnerships
Last updated