🔥Protocol Revenue & Distribution

The f(x) Protocol generates revenue through multiple mechanisms designed to sustain the system while rewarding participants and long-term supporters.

1. Revenue Sources

• Collateral Yields: Earnings derived from the collateral (e.g., stETH) backing the protocol.

• Opening and Closing Fees: Fees collected when users open or close xPOSITIONs, contributing to the protocol's revenue stream.

2. Revenue Distribution

All fees and collateral yields are redistributed between the Stability Pool and the f(x) Treasury, with the allocation determined by governance.

• Stability Pool: A portion of the revenue supports the Stability Pool, reinforcing system stability and rewarding participants.

• f(x) Treasury: The remaining revenue is allocated to the Treasury, where a proportion of it is distributed to veFXN holders. This mechanism provides long-term supporters with substantial financial benefits, fostering a robust and engaged community around the protocol.

Fees Distribution Parameters

Global

Fee	Distribution
fxUSD redemption fee	70% to the Stability Pool / 30% Protocol Revenue
Stability Pool early exit fee	100% to the Stability Pool

ETH xPOSITIONs

Fee	Distribution
Collateral Yields	100% to the Stability Pool
xPOSITION opening/closing fees	70% to the Stability Pool / 30% Protocol Revenue
Rebalance / Liquidation: 10% of the bounty	70% to the Stability Pool / 30% Protocol Revenue
Funding costs	100% to the Stability Pool
Unused Slippage	70% to the Stability Pool / 30% to the Rebate Reserve
Aave yields (FIP-12)	100% to the Stability Pool

BTC xPOSITIONs

Fee	Distribution
xPOSITION opening/closing fees	50% to the Stability Pool / 50% Protocol Revenue
Rebalance / Liquidation: 10% of the bounty	50% to the Stability Pool / 50% Protocol Revenue
Funding costs	100% to the Stability Pool
Unused Slippage	50% to the Stability Pool / 50% to the Rebate Reserve

*The rebate reserve is built to offer a fee rebate in the future 👀

Looking at the fee settings? 👉 Fees

Protocol Revenue Distribution Parameters

All fees captured by the Treasury are distributed in this way.

veFXN	75%
Treasury Multisig	12,5%
Reserve / Insurance Fund	12,5%

The Treasury Multisig allocation helps to sustain the protocol by funding further developments