Inside the valve body. The small one that the end of the poppet passes through so it can be struck by the rammer. That one will allow air to leak out inside the body. If it was the larger one that's on the poppet air would leak out the bolt.
I used dow55 on my poppet and valve orings just to make sure they maintain a nice fit over time. I also make sure to put a little extra glob on the end of the poppet to make sure there is a good reserve in there. That way I don't have to break the valve down as often. Remember........balanced valves do require some love from time to time. It's the price you pay for the extra smooth action.