Protocol Economics
This documentation is in editing mode. The content here is not finalized.
Foresure generates revenue through trading fees, ensuring the sustainability of the platform without relying solely on token inflation.
Fee Structure
Every trade on Foresure incurs a fee, which is split between Liquidity Providers (LPs) and the Protocol Treasury.
| Fee Type | Rate | Recipient | Purpose |
|---|---|---|---|
| Liquidity Fee | 1.0% - 5.0% | LPs | Compensates LPs for risk and Impermanent Loss. |
| Protocol Fee | 0.5% | Treasury | Funds development, security audits, and operations. |
Note: Fees are dynamic based on market volatility. Stable markets have lower fees.
Revenue Flow
- User Trades: A user buys $100 worth of "YES" tokens.
- Fee Deduction: $1.50 (1.5%) is deducted.
- $1.00 goes to the Liquidity Pool (increasing share value for LPs).
- $0.50 is sent to the Treasury Contract.
- Net Trade: $98.50 is used to purchase the outcome tokens.
Treasury Usage
The Treasury funds are managed by the Governance Multi-Sig (and eventually the DAO).
- Development: paying contributors and infrastructure costs.
- Security: Bug bounties and audits.
- Growth: Marketing campaigns and trading competitions.
- Insurance Fund: A portion is set aside to cover potential shortfall events (e.g., critical bugs).