its the oil that you mix in with your gas, or the oil that goes in the oil tank if you've still got the injection system. its odd to think about when you're used to 4 stroke stuff. it obviously works though
The pre-mix (or injector oil if you've still got that system on your blaster) is what lubes the crank. The oil falls out of suspension when it gets heated up and pressurized in the crankcase, so there should be a pool of oil in the bottom of the crank.
Like stated above the oil is mixed in with your gas that's how the crank, rod, piston and bearings get lubes. Most run 32:1 or if you still have the oil injection you have to keep the tank full. The oil tank is under the seat.