# Protocols

Protocols use [Arcadia Foundry](https://docs.arcadia.finance/foundry-intro) to manage onchain liquidity. Foundry serves two use cases:

* [**Protocol Owned Liquidity**](https://docs.arcadia.finance/foundry-intro/foundry-pol)**:** Manage liquidity for your native token — rebalancing, bootstrapping, buybacks, and custom distribution strategies.
* [**Treasury Liquidity Management**](https://docs.arcadia.finance/foundry-intro/foundry-treasury)**:** Deploy treasury assets (USDC, WETH, wstETH, etc.) as liquidity in established pairs for yield.

Both are non-custodial, DAO/multi-sig compatible, and fully automated. See [Foundry Benefits](https://docs.arcadia.finance/foundry-intro/foundry-benefits) for details.

## What are the risks

Protocol liquidity positions are exposed to:

* Smart contract risks
* Market risks
* Impermanent loss

And depending if they use margin or not:

* Interest rate risk (interest rate can exceed yields)
* Liquidation risk