> For the complete documentation index, see [llms.txt](https://csigma-asset-tokenization.gitbook.io/atlas/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://csigma-asset-tokenization.gitbook.io/atlas/pool-manager/reserve-management/update-reserve-percentage.md).

# Update Reserve Percentage

### Overview

The **Reserve Percentage** defines the portion of lender deposits that will be retained as **liquidity within the pool** instead of being deployed into underlying investments.

This reserve helps ensure that the pool maintains **sufficient liquidity to process withdrawals without delay**.

By default, every Tokenized Pool is created with a **5% reserve percentage**, but the **Pool Manager can update this value** depending on the liquidity requirements of the pool.

### Purpose of Pool Reserves

The reserve balance acts as a **liquidity buffer** for the pool.

Instead of deploying 100% of lender deposits into investments, a small portion is retained to:

* Support **instant or quick withdrawals**
* Reduce liquidity pressure on the pool
* Maintain operational flexibility

Without reserves, all funds would be deployed to Sub Pools, making withdrawals dependent on asset repayments.

### How It Works

When lenders deposit funds into a Tokenized Pool:

1. A portion of the deposit is retained in the **Reserve Balance**
2. The remaining amount becomes **Available Balance**
3. The **Available Balance** can then be deployed by the Pool Manager into Sub Pools

### Example

Assume the **Reserve Percentage is set to 5%**.

A lender deposits **100 USDC** into the pool.

The funds will be split as follows:

| Category          | Amount  |
| ----------------- | ------- |
| Reserve Balance   | 5 USDC  |
| Available Balance | 95 USDC |

* **5 USDC** remains in the pool as **Reserve Balance**
* **95 USDC** is transferred to the **Fund Manager** and displayed as **Available Balance**

The Pool Manager can deploy the **Available Balance** to Sub Pools according to the configured allocation.

### Updating the Reserve Percentage

The Pool Manager can update the reserve percentage at any time.

#### Step 1 — Open Tokenized Pool

The Pool Manager navigates to the **Asset Tokenization** tab and selects the desired **Tokenized Pool**.

#### Step 2 — View Reserve Configuration

Inside the pool dashboard, the Pool Manager can view the current **Reserve Percentage**.

By default, this value is **5%**.

<figure><img src="https://3125893853-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2Ffmxk4zctrz092V9PoVdO%2Fuploads%2F7bThln4VYEPYCtCVKdb8%2Fimage.png?alt=media&amp;token=585254a5-3265-4910-ad1d-4e01910880d9" alt="" width="322"><figcaption></figcaption></figure>

#### Step 3 — Update Reserve Percentage

The Pool Manager can update the reserve percentage according to the liquidity requirements of the pool.

After updating, the new reserve percentage will apply to **future deposits**.

<figure><img src="https://3125893853-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2Ffmxk4zctrz092V9PoVdO%2Fuploads%2FbdTCpiEDsJacu9VulRCk%2Fimage.png?alt=media&amp;token=fed10b77-0d29-42ec-9286-f7195ba995ea" alt="" width="320"><figcaption></figcaption></figure>

### Important Notes

* The default reserve percentage is **5%**.
* The reserve balance is used to **serve withdrawals without needing asset liquidation**.
* Only the **Available Balance** can be deployed into Sub Pools.
* Adjusting the reserve percentage affects **future deposits**, not previously allocated funds.

### Role Responsibility

**Pool Manager Responsibilities**

* Configure reserve percentage based on pool liquidity needs
* Ensure sufficient liquidity is available for withdrawals
* Manage deployment of Available Balance to Sub Pools

This reserve mechanism ensures that Tokenized Pools maintain **sufficient liquidity while still allowing capital to be efficiently deployed into underlying investments.**