> For the complete documentation index, see [llms.txt](https://docs.mezz.finance/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.mezz.finance/how-it-works/liquidity.md).
# Liquidity
USDC deposited into Mezzanine enters a three-layer liquidity system before being deployed into yield-generating strategies.
**Issuance Vault**: The central settlement layer for all mzUSD mints and redemptions. Maintains a dedicated liquid buffer for fast withdrawals and rebalances with the Reservoir to maintain target levels. If the buffer is temporarily below a redemption amount, it pulls from the Reservoir and Master Vault, if needed.
**Reservoir**: The protocol's on-chain liquid reserve. Target \~1–5% of total liquidity. Refills the Issuance Vault as needed, **supports short-duration yield strategies**. A portion of funds is redeployed to Master Vault if an established amount of funds is reached in the Reservoir.
The Reservoir rebalances with the Issuance Vault to support mzUSD redemptions. If the Issuance Vault drops below its target level, the Reservoir covers the deficit. Excess funds from the Issuance Vault are moved back to the Reservoir.
If the established threshold in the Reservoir is reached, all funds are deposited from it into the Reservoir’s Strategy and Upshift Vault via Chainlink Automation.
The protocol can pause an individual strategy if conditions require it.
**Master Vault**: The protocol's primary capital pool. Target \~95–99% of total liquidity. Operated by curators within predefined risk parameters for yield generation.
The Issuance Vault, the Reservoir (including its strategies and earnings), and the Master Vault (including its strategies and earnings) are included in Accountable's NAV calculations.
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