# What is bonding and POL?

## What is bonding?

![](https://cdn-images-1.medium.com/max/1200/1*D7PTvNNMAkWka9YvaO4oJg.png)

Bonding is a mechanism where a user can sell liquidity pool tokens to a protocol in exchange for its native token through what we call a bond.

To incentivize users to sell liquidity pool tokens to the protocol, rather than the open market, bonds are offered at a market discount. Bonds have a vesting period of 5 days to prevent users from selling all the discounted tokens for a quick profit.

## What is POL?

![](https://cdn-images-1.medium.com/max/1200/1*kJo13YE5V_n0qaj94M8gHA.png)

Protocol owned liquidity (POL) is an essential part of DeFi as it guarantees users that there will be sufficient and sustainable liquidity in token pools.

POL transforms liquidity from a liability to a revenue source. Token swaps using liquidity pools can generate fees depending on the protocol, which can then be distributed to the holders of the governance token. A protocol that uses Karma Bond will become a liquidity provider itself as well as a governance token holder. They will also receive a share of the generated fees.