February 15, 2022, 2:50PM EST
• 6 min read
![](https://platoaistream.net/wp-content/uploads/2022/02/tokemak-liquidity-rental-as-a-service.jpg)
Quick Take
- Tokemak deploys protocol-controlled assets into providing liquidity on outside trading venues. TOKE stakers direct the liquidity and backstop the protocol in case of extreme protocol losses.
- Liquidity providers lend assets to Tokemak in exchange for inflationary TOKE rewards. They are made whole by protocol reserve and TOKE stakers in case of extreme protocol losses.
- It is unclear how Tokemak would combat impermanent loss incurred from providing passive liquidity.