# Discussion: The Reserve as a Liquidity Provider in the VCM

**URL:** <https://forum.celo.org/t/discussion-the-reserve-as-a-liquidity-provider-in-the-vcm/3899>\
**Category:** Mento\
**Created:** [June 29, 2022, 11:42am UTC](https://forum.celo.org/t/discussion-the-reserve-as-a-liquidity-provider-in-the-vcm/3899 "2022-06-29T11:42:54Z")\
**Posts on this page:** 1\
**Showing post:** 6

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**Author:** ![Slobodan](https://sea2.discourse-cdn.com/flex020/user_avatar/forum.celo.org/slobodan/32/5849_2.png) [@Slobodan](https://forum.celo.org/u/Slobodan)\
**Post date:** [July 1, 2022, 9:17am UTC](https://forum.celo.org/t/discussion-the-reserve-as-a-liquidity-provider-in-the-vcm/3899/6 "2022-07-01T09:17:48Z")

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Thanks everyone!

> [@markbarendt](#):
>
> Is there a way to segment the reserve into different vaults, for lack of a better word.
> 
> What I’m trying to look forward toward is the regulatory requirements that will be likely for the reserve. Want to avoid co-mingling ‘invested funds’ with the ‘1:1’ backing of the stables.

Yes and this is very much in line with what is currently discussed also within the Mento team. Overall, the idea would be to separate assets that are used for immediate issuance & redemption from other assets (e.g. impact assets).

In a sense, this was partly implemented through [#CGP62](https://celo.stake.id/#/proposal/62), which essentially splits the reserve into a primary reserve (USDC/DAI + CELO) and a secondary reserve (BTC, ETH, cMCO2). The secondary reserve only holds assets if the primary reserve is sufficiently collateralized (2x under CGP62). This is also roughly in line with the ‘x \< R \< X’ framework that was briefly discussed [here](https://forum.celo.org/t/green-assets-as-collaterals-for-stable-coins/3709/9) but it’s not quite there yet.

In my opinion, we should expand on CGP62 and the ‘x \< R \< X’ framework but make it asset or asset-group specific. This would essentially mean that there is a primary reserve (immediate issuance + redemption) and multiple sub-reserves/vaults with vault-specific liquidation and collateralisation parameters. It’s probably best to discuss this in a stand-alone post but just wanted to mention that this is something the Mento team is actively working on.

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