# GLV Liquidity Pool

## Overview

GSOL introduces a Global Liquidity Vault (GLV) as the core liquidity layer for perpetual trading.

Instead of fragmented liquidity across multiple pools, GSOL aggregates all liquidity into a single unified vault, which is dynamically allocated across supported perpetual markets (e.g., BTC, SOL, ETH).

This design ensures:

* Deep and consistent liquidity across all markets
* Efficient capital utilization
* Simplified liquidity provision for users

## How GLV Works

Users deposit assets into the GLV and receive a proportional share of the vault.

The GLV then allocates liquidity internally across different markets through a virtual allocation system.

```
User Deposit → GLV → Allocated to Markets (BTC / SOL / ETH)
```

Each market operates with its own internal accounting, allowing GSOL to manage exposure and risk independently while maintaining a single liquidity source.

## Liquidity Provider (LP) Incentives

Liquidity providers earn yield from multiple sources:

* Trading fees from perpetual positions
* Funding fees between traders
* Price impact fees from imbalanced trades

LP performance is directly influenced by trader PnL — LPs benefit when traders incur losses and vice versa.

## Risk & Allocation Model

GLV liquidity is distributed across markets using a combination of:

* Base allocation (predefined distribution per market)
* Dynamic adjustment (based on demand, volume, and risk conditions)

This ensures balanced exposure and prevents over-concentration in a single market.

## Risk Engine

GSOL integrates a multi-layered risk engine to protect liquidity providers and maintain system stability.

1. **Open Interest (OI) Cap**, Limits the total position size that can be opened per market.
2. **Funding Mechanism**, Balances long and short positions.
3. **Dynamic Fees (Price Impact)**, Adjusts trading costs based on market imbalance.
4. **Position Limits**, Restricts the maximum size per position.
5. **Reserve Factor**, Limits how much of the GLV can be used to back open positions.
6. **PnL Factor Cap**, Caps the impact of unrealized trader profits on vault valuation during deposits and withdrawals.
7. **Early Liquidation**, Triggers position closure before full insolvency.
8. **Auto-Deleveraging (ADL)**, A last-resort mechanism activated during extreme market conditions.
9. **Oracle-Based Pricing**, All positions and orders are executed using external oracle prices.
10. **Keeper-Based Execution**, Orders and liquidations are executed by decentralized keepers.