Fee Distribution
The LIQUID protocol implements a sophisticated fee distribution system that ensures fair and sustainable rewards for all participants while maintaining protocol stability.
Fee Sources
Transaction Fees
Fees collected from buy and sell transactions are distributed across multiple categories to ensure balanced ecosystem growth.
VCM Commissions
Commissions earned by Valve Controller Modules are distributed to their holders based on configured parameters.
Distribution Channels
HYPE Rewards Pool
The majority of collected fees are allocated to the HYPE rewards pool, which is distributed to protocol participants based on their contribution and engagement.
Protocol Treasury
A portion of fees is directed to the protocol treasury for development, marketing, and strategic initiatives.
Liquidity Pool
Fees are automatically added to the liquidity pool to ensure stable trading conditions and reduce price impact.
Distribution Parameters
Allocation Ratios
- HYPE Rewards Pool: 60%
- Protocol Treasury: 20%
- Liquidity Pool: 20%
Dynamic Adjustment
Distribution ratios can be adjusted through governance proposals to optimize protocol performance and sustainability.
Fee Collection
Fees are collected automatically through smart contracts and distributed according to the configured parameters. All transactions are transparent and verifiable on-chain.