Blockchain & Cryptocurrency Glossary

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Protocol Revenue Split

1 min read
Pronunciation
[proh-tuh-kawl rev-uh-noo split]
Analogy
Like a restaurant dividing its profits between owners, staff bonuses, and reinvestment based on predefined percentages.
Definition
The mechanism by which fees and revenues generated by a protocol—such as trading fees, interest, or insurance premiums—are allocated among stakeholders, treasury, and development funds.
Key Points Intro
Revenue splits define economic flows and incentives within decentralized protocols.
Key Points

Stakeholder shares: Allocations to stakers, liquidity providers, and token holders.

Treasury funding: Portion reserved for protocol development.

Governance rewards: Incentives for voting participation.

Burn mechanism: Optionally burns part to reduce supply.

Example
A DEX splits trading fees: 60% to LPs, 20% to governance treasury, 10% to stakers, and 10% burned.
Technical Deep Dive
Fee module collects `feePool`, then on epoch end calls `distribute()` which iterates over stakeholder groups and transfers according to basis points in `config` storage.
Caveat
Rigid splits can limit adaptability; enable governance to adjust parameters.
Related Terms
Staking Rewards
Burn

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