📊Revenue Sharing

YieldX utilizes a revenue-sharing mechanism to ensure that users, particularly $YIELDX token holders, benefit directly from the economic activities on the platform. This approach incentivizes long-term holding of the $YIELDX token while promoting active participation in the protocol's lending and borrowing services.

Sources of Revenue

The main sources of revenue on the YieldX platform come from:

  • Borrowing Fees: When users borrow liquidity using their assets as collateral, they pay interest. A portion of this interest goes into the revenue pool that is distributed to $YIELDX holders.

  • Liquidation Fees: In the event of a liquidation, a portion of the fees collected from liquidating a borrower's collateral is also added to the revenue pool.

  • Leverage Fees: When users leverage their liquidity positions, they may incur fees depending on the extent of leverage and the length of time. These fees contribute to the protocol's overall revenue.

  • Tax Revenue: A portion of the tax collected from trading $YIELDX will also be redistributed to holders.

  • Staking Rewards: Part of the staking rewards distributed to users are derived from fees generated by the protocol’s overall activity, including fees collected from liquidity providers and borrowers.

Distribution Mechanism

The revenue generated by the YieldX platform is distributed among $YIELDX token holders and stakers in the following ways:

  • Staking Rewards Pool: A percentage of the revenue generated from platform fees is allocated to the staking rewards pool. Users who stake their $YIELDX tokens are eligible to receive a share of this pool based on the amount of $YIELDX they have staked. More details will follow in the Staking section.

  • Revenue Sharing Pool: Another portion of the platform's revenue goes to the broader revenue sharing pool. This pool is distributed to $YIELDX token holders on a regular basis, based on the proportion of tokens held. This incentivizes long-term holding of $YIELDX, as the more tokens you hold, the larger your claim on the protocol's earnings.

  • Treasury and Ecosystem Development: A portion of the revenue is reserved for the YieldX treasury. This treasury fund is used for protocol development, marketing, and partnerships, helping to grow the ecosystem and, by extension, increase the overall revenue over time.

Tiers of Participation

The revenue-sharing program includes different tiers of participation, depending on how actively users engage with the protocol.

  • Tier 1 (Basic Holders): Users simply holding $YIELDX tokens in their wallets are entitled to 5% of the revenue pool.

  • Tier 2 (Stakers): Users who stake $YIELDX tokens are entitled to 15% of the revenue pool.

  • Tier 3 (Liquidity Providers): Users who provide liquidity and hold $YIELDX are entitled to 25% of the revenue pool.

  • Tier 4: Users who both stake $YIELDX and provide liquidity are entitled to 40% of the revenue pool.

Governance Role in Revenue Sharing

$YIELDX holders also have the ability to vote on protocol updates related to revenue distribution. This could include deciding:

  • What percentage of platform fees should be distributed as staking rewards.

  • How much should be reinvested into the protocol treasury.

  • The frequency and conditions under which revenue is distributed.

More details will follow in the Governance Protocol section.

Long-Term Incentives

The overall goal of YieldX's revenue-sharing program is to align incentives between the protocol and its users. By offering meaningful returns for token holders and stakers, YieldX fosters a loyal community of participants that can help drive sustainable growth. Over time, as the platform’s user base and liquidity grow, the amount of revenue distributed to $YIELDX holders will increase, thereby enhancing the value of the token.

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