> For the complete documentation index, see [llms.txt](https://docs.ape.bond/apebond/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.ape.bond/apebond/products-and-features/liquidity-health/dashboard-methodology/liquidity-ownership.md).

# Liquidity Ownership

Liquidity Ownership (LO) measures the ratio between the amount of token liquidity that a project owns compared to the amount of liquidity a project should own. This metric is designed to look at a project’s “liquidity debt”: the difference between a project’s owned, extractable liquidity and a baseline level of sustainable liquidity.

Simply put, LO looks to answer the following question: Does this project own ample liquidity to back the token based on its MCAP? 

### Liquidity Ownership Formula

$$LO = (\frac{ovel/X}{susline})^{po}$$     *for* $$ovel/X< SL(X)$$

$$LO=1$$                    *for* $$ovel/X >= SL(X)$$

*where:*

$$susline = SL(X)$$     *for* $$SL(X) < 1$$

$$susline = 1$$                *for* $$SL(X) >= 1$$

&#x20;*where:*

$$SL(X)= (0.7/t1)^{1/α}\*(\frac{e^{X/s} -  e^{-X/s}}{e^{X/s} +  e^{-X/s}})^{-β/α}$$

*Constants configs.:*

$$po = 0.5$$

*For M. Caps. <= $250M:*

$$t1=14.4$$

$$s=1,062,000,000$$

$$β=0.31$$

$$α=0.69$$

*For M. Caps. > $250M:*

$$t1=18.4$$

$$s=3,000,000,000$$

$$β=0.37$$

$$α=0.63$$

*Variables description:*

$$X$$*: Market cap. in usd*

$$Y$$*: Extractable liquidity to market cap. ratio*

$$ovel$$*: Owned valid extractable liquidity in usd*

$$susline$$*: The* $$ovel / X$$ *ratio considered the minimum health standard for any given market cap.*

### Scoring

We directly compare owned extractable liquidity vs the sustainability range lower bound.&#x20;

The difference between this and LS is what sustainability range bound we compare to (upper for LS vs lower for LO) & whether or not rented liquidity is factored in (rented + owned for LS vs owned for LO).

The more owned liquidity you have, the better score you receive. If you have no Protocol Owned Liquidity you would receive a 0 score. If owned liquidity is equal to or greater than the sustainability range lower bound, then you score a perfect 100. That would signify the project owns the minimum amount of liquidity that we have determined is sustainable. Anything in between scores from 0 to 100.&#x20;

One thing to note - projects get rewarded with more points towards their score early on. Think of it as a simple sqrt(x) graph, where your score goes up faster at the beginning and slower towards the end. For example, right now if a project owns 25% of the liquidity we deem they should, we are giving them a score of 50/100. This is purposeful to drive the importance of POL.