Fees and revenue
Trading fees, reserve yield, and buyback funding are separate streams.
Trading fees pay for trading liquidity and protocol operations. Reserve yield is earned separately on the USDG backing branded stablecoins and can fund buybacks.
| Stream | Destination |
|---|---|
| Protocol trading fee | Collected through the pool's fee hook for the protocol treasury. |
| Pool trading fee | Accrues to liquidity providers whose positions are in range. |
| Reserve yield | Divided by the market's fee vault between the protocol, in-range liquidity, and buybacks. |
| Network gas | Paid separately to process transactions. |
How trading fees combine
For an exact-input trade, the protocol fee is taken first; the pool fee applies to the remainder. The combined rate is protocol rate + (1 − protocol rate) × pool rate, before rounding.
Hypothetical example, not a live rate: with a 100-unit input, a 1% protocol fee takes 1 unit. A 1% pool fee then takes 0.99 units from the remaining 99. Total fees are 1.99 units, leaving 98.01 for the swap. The output still depends on the pool price and price impact. Network gas is separate.
How reserve yield is divided
For an amount distributed by the vault:
Buyback funding = amount distributed − protocol share − LP share.
Shares use the market's configured basis-point rates: 10,000 basis points = 100%. Rounding remainder goes to buybacks.
Hypothetical example: distributing 100 USDG with a 10% protocol share and 40% LP share sends 10 to the protocol, 40 to liquidity, and 50 to buybacks. These are illustrative percentages.
The LP allocation goes only to positions in range at distribution time, through the pool's fee accounting. If none are in range, those 40 units also go to buybacks. Funding the engine does not itself execute a purchase; see Buybacks and locking.
Check the selected market's configuration and transaction quote for applicable rates. Protocol trading rates can change through administrative controls; contract upgrades can also change behavior.
Expand the swap details to inspect the route, swap fee, protocol portion where shown, and minimum received. An asset-to-asset Zap includes two pool swaps, each with trading fees. An ETH liquidity zap also trades ETH into USDG before funding the market. Fee-free reserve conversion does not make these trades free, and approvals or separate Zap steps can each require gas.