Economic Model
Revenue Sources
LiquitX generates sustainable revenue through multiple fee streams:
| Fee Type | Rate | Recipient |
|---|---|---|
| AMM Swap Fee | 0.30% | 80% LP / 20% Protocol |
| Management Fee | Up to 5% annually | Fund Manager |
| Junior Marketplace Fee | Up to 5% per fill | Protocol fee recipient |
Yield Distribution Waterfall
When funds generate returns, cash flows through a strict priority order:
LP Token Economics
Liquidity Providers receive ERC-20 LP tokens representing their pool share:
Value Accrual
- Swap fees: 80% of all trading fees compound into pool value
- Underlying yield: Senior tranche returns flow through LP tokens
- Price appreciation: As RWAs appreciate, LP token value increases
LP Token Uses
- Staking (boosted yield): Lock LP tokens in LPStaking for up to 2x reward multiplier
- AMM trading: Swap LP tokens for other assets
- Redemption: Burn LP tokens to withdraw underlying assets
Risk Vault Economics
Risk Vaults use share-based accounting (similar to ERC-4626). LPs deposit lxUSD and receive vault shares. As deployed capital earns yield from Asset Markets, the share price increases — LPs profit by holding or withdrawing shares.
Share Pricing
- sharePrice = totalValue / totalSupply
- totalValue = reserve (lxUSD in vault) + deployedValue (capital in markets)
- Withdrawals are limited to available reserve — capital deployed to Asset Markets is illiquid until maturity
Protocol Treasury
The protocol treasury accumulates value from:
- 20% of AMM swap fees (configurable protocol fee share)
- Yield waterfall treasury allocation (governance-configurable, max 30%)
- Junior marketplace trading fees
- Asset origination fees
Treasury Allocation
Real Yield Philosophy
LiquitX prioritizes sustainable economics over token-inflated yields:
| Characteristic | LiquitX (Real Yield) | Typical DeFi (Inflationary) |
|---|---|---|
| Yield source | Transaction fees + RWA cashflows | Token emissions |
| Sustainability | Perpetual (revenue-backed) | Time-limited (emission schedule) |
| Token dilution | None | Continuous |
| Value accrual | LP tokens appreciate | Farming rewards decrease |
Stablecoin Economics
Each jurisdiction operates with native stablecoins:
| Stablecoin | Peg | Collateral | Mechanism |
|---|---|---|---|
| lxUSD | $1.00 | USDC/USDT | 1:1 wrapped |
| lxEUR | €1.00 | EUROC/EURS | 1:1 wrapped |
| lxBRL | R$1.00 | ETH/stablecoins | 150% overcollateralized |