> ## Documentation Index
> Fetch the complete documentation index at: https://docs.elata.bio/llms.txt
> Use this file to discover all available pages before exploring further.
# Revenue Model
> How fees are collected and distributed across the ecosystem
## Overview
Protocol fees come from trading, launches, and tournaments. They get split 70/15/15 and distributed to stakers, veELTA holders, and treasury. No token inflation — rewards come from actual usage.
Fee parameters can be changed through governance.
***
## Fee Sources
### 1. Trading Fees (Primary Revenue)
A **1% fee** is charged on all bonding curve transactions:
| Transaction Type | Fee | When Applied |
| --------------------- | --- | ----------------- |
| Buy on Bonding Curve | 1% | Before graduation |
| Sell on Bonding Curve | 1% | Before graduation |
**Example**: Buying 1,000 ELTA worth of app tokens costs 1,010 ELTA total (1,000 + 10 fee).
### 2. App Launch Fees
When developers launch new apps, they pay **110 ELTA**:
| Component | Amount | Destination |
| -------------- | -------- | ------------------ |
| Seed Liquidity | 100 ELTA | Bonding Curve |
| Protocol Fee | 10 ELTA | Treasury → Rewards |
### 3. App Token Transfer Fees
App tokens include a **1% transfer fee** (configurable, max 2%):
| Parameter | Default | Maximum |
| ------------ | ------- | ------- |
| Transfer Fee | 1% | 2% |
This creates ongoing yield even after graduation to DEX trading.
### 4. Tournament Fees
Tournaments collect fees from prize pools:
| Fee Type | Rate | Destination |
| ------------ | ---- | --------------------- |
| Protocol Fee | 2.5% | Rewards Distributor |
| Burn Fee | 1% | Burned (deflationary) |
***
## The 70/15/15 Split
All protocol revenue is automatically split:
```mermaid theme={null}
graph TD
A[Protocol Fees] --> B[Rewards Distributor]
B --> C[70% App Token Stakers]
B --> D[15% veELTA Holders]
B --> E[15% Treasury]
```
### Recipient Details
The majority of fees go to users who stake app tokens in staking vaults. Rewards are distributed proportionally based on stake size.
**How to earn**: Stake any app token in its staking vault. The longer and more you stake, the larger your share of rewards.
A portion of all protocol fees flows to users who have locked ELTA as veELTA. This rewards long-term protocol supporters.
**How to earn**: Lock ELTA for 7 days to 2 years. Longer locks receive boosted voting power (1x-2x).
Treasury funds support ongoing development, grants, and ecosystem growth initiatives. Treasury spending is governed by veELTA holders.
**What it funds**: Developer grants, security audits, marketing, partnerships, and infrastructure.
***
## Revenue Flow Example
Let's trace a \$1,000 ELTA trade through the system:
### Step 1: Trade Execution
A user buys app tokens worth **1,000 ELTA** on the bonding curve.
| Amount | Destination |
| -------- | ------------------ |
| 990 ELTA | App Token Purchase |
| 10 ELTA | Trading Fee (1%) |
### Step 2: Fee Distribution
The 10 ELTA trading fee is split:
| Recipient | Share | Amount |
| -------------- | ----- | -------- |
| App Stakers | 70% | 7 ELTA |
| veELTA Holders | 15% | 1.5 ELTA |
| Treasury | 15% | 1.5 ELTA |
### Step 3: Staker Rewards
The 7 ELTA for app stakers is distributed proportionally:
```
Your Share = (Your Stake / Total Staked) × 7 ELTA
```
If you've staked 1% of the total vault, you earn 0.07 ELTA from this trade.
***
## Yield Calculations
### App Staker Yield
Your yield as an app staker depends on:
* **Your stake size** relative to total staked
* **Trading volume** of the app token
* **Transfer volume** after graduation
**Formula:**
$$
\text{Annual Yield} = \frac{\text{Your Stake}}{\text{Total Staked}} \times \text{Annual Fees} \times 0.70
$$
### veELTA Yield
Your yield as a veELTA holder depends on:
* **Your veELTA balance** relative to total veELTA
* **Total protocol revenue** across all apps
**Formula:**
$$
\text{Annual Yield} = \frac{\text{Your veELTA}}{\text{Total veELTA}} \times \text{Annual Protocol Fees} \times 0.15
$$
***
## Claiming Rewards
### For App Stakers
Rewards accumulate in the Rewards Distributor and can be claimed at any time:
1. Go to the app's detail page
2. Navigate to the "Rewards" section
3. Click "Claim" to receive your ELTA
### For veELTA Holders
veELTA rewards are distributed in epochs:
1. Go to the [Rewards page](https://app.elata.bio/rewards)
2. View your claimable rewards
3. Click "Claim veELTA Rewards"
There's no deadline to claim rewards. Unclaimed rewards remain available indefinitely.
***
## Deflationary Mechanics
Beyond fee distribution, Elata includes deflationary mechanisms:
### Item Purchase Burns
When users buy items in apps, **100% of the payment is burned**:
```
User pays 100 APP tokens → 100 APP tokens burned → Item minted
```
### Tournament Burns
Tournament prize pools include a **1% burn fee**:
| Pool Size | Burn Amount | Winners Receive |
| ------------- | ----------- | ------------------ |
| 10,000 tokens | 100 burned | 9,650 (after fees) |
### App Token Supply Reduction
Over time, burns from items and tournaments reduce app token supply, benefiting remaining holders.
***
## Growth Loop
More apps → more trading → more fees → better yields → more staking → more demand → more apps.
```mermaid theme={null}
graph LR
A[More Apps] --> B[More Trading]
B --> C[More Fees]
C --> D[Better Yields]
D --> E[More Staking]
E --> F[More Demand]
F --> A
```
Simple: usage drives rewards, rewards drive usage.
***
## vs. Inflationary Models
| | Elata | Most DeFi |
| -------------------------- | ----------------------- | --------------------- |
| **Where yield comes from** | Fees from usage | Printing new tokens |
| **What happens over time** | More usage = more yield | Dilution eats returns |
| **Who wins** | Long-term holders | Early farmers |
***
## Key Numbers
| Metric | Value |
| ------------------------- | ------------ |
| Trading Fee | 1% |
| App Launch Fee | 10 ELTA |
| Tournament Protocol Fee | 2.5% |
| Transfer Fee (App Tokens) | 1% (default) |
| App Staker Share | 70% |
| veELTA Share | 15% |
| Treasury Share | 15% |
***
## Next Steps
Start earning 70% of trading fees
Earn 15% of all protocol fees