# Liquidity

<figure><img src="/files/QVPS2LCZWQAtxsaie2AF" alt="" width="346"><figcaption></figcaption></figure>

Managing liquidity is a key part of our strategy , where we use a decentralized approach pioneered by Linq Protocol. This method ensures that liquidity pools are both decentralized and secure, with liquidity maintained and distributed directly by our community and investors. This not only boosts the stability and utility of our tokens but also strengthens our entire ecosystem.

To bolster stability, we apply a 6% tax on all $RARE token transactions. This tax serves two main purposes:

1. **LP Token Generation (3%)**: Half of the tax goes towards generating LP tokens. These can either be claimed or staked for additional ETH rewards, encouraging active community involvement and boosting liquidity.
2. **Rare Treasury Fund (3%)**: The other half feeds into the Rare Treasury Fund, vital for the ongoing development, marketing, and enhancement of both RareArt and RareTokens.&#x20;

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