Permanent liquidity
An LP position the program owns and can never withdraw. Separate from treasury liquidity, which is not locked.
Permanent liquidity is an LP position the program owns with no instruction that can withdraw it. Once added, it stays in the pool forever.
Contributed liquidity is deployed by the permissionless deploy_permanent_liquidity instruction into a Meteora DAMM v2 position that is placed under DAMM's permanent_lock. That lock is irreversible. Fees the locked position earns are recycled into more permanent liquidity.
The exact conversion math is on the fee model page.
Deeper liquidity reduces price impact per trade. It does not guarantee a minimum price.