> For the complete documentation index, see [llms.txt](https://docs.callput.app/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.callput.app/liquidity-providers/olp-overview.md).

# OLP overview

This page explains the economics of liquidity provision on Callput.

## What OLP is

OLP is the liquidity layer that backs the options market. LPs deposit assets, receive OLP exposure, and take on the economics of the options market rather than a passive deposit-yield profile.

## What OLP holds

The key AUM model includes two components:

* OLPDV, or deposited value
* OLPPV, or position value

This matters because LP exposure is not just the value of deposited assets. It also reflects the option-market position layer.

## Asset side vs risk side

### Asset side

* deposited assets in the vault
* pool value reflected through USDG minting logic
* positive position-value contribution

### Risk side

* adverse trader PnL
* negative position-value contribution
* reserved or utilized liquidity
* dependence on feeds, queue execution, and settlement

## Add and remove liquidity

At the contract level:

### Add liquidity

1. the LP deposits a supported token
2. the vault mints `USDG`
3. OLP is minted based on AUM and supply

### Remove liquidity

1. the LP burns OLP
2. the corresponding USDG value is calculated
3. the vault returns the requested output asset

In the public LP flow, liquidity entry and exit should be understood together with the epoch-based queue described on the next page.

## Return drivers

OLP return is driven by:

* premium and fee flows from trader activity
* option-market position value
* the utilization state of the pool

## Loss drivers

LPs should expect exposure to:

* adverse position value
* capital tied up in reserved or utilized liquidity
* pricing and execution dependence
* timing risk in entry and exit

## Key LP metrics

The main metrics LPs should track are:

* AUM
* total pool
* reserved liquidity
* utilized liquidity
* available liquidity
* deposited liquidity

## What LPs should expect

* OLP is risk-bearing liquidity
* AUM reflects more than deposited balances
* LP activity is better understood through the `sVault` epoch flow than through an instant-deposit model