# Protocol Economics

<figure><img src="/files/vV0l5z54fzq9l3ThDBwd" alt=""><figcaption></figcaption></figure>

Protocol economics keep trading friction low while giving LPs predictable cash flows and the treasury enough runway to harden the system. Fees are simple, sharing rules are disclosed, and safeguards are timelocked.

### 8.1 Revenue Sources

Revenue is intentionally narrow and scales with real usage. Most trading venues earn upfront; BasePerp earns mainly when users realize profits.

* **Win-based fees**: Charged only on profitable closes under ZFC via profitFeeRate.
* **Hybrid fixed fees (optional)**: Tiny per-order fees on select thin markets to deter spam and cover ops.
* **Liquidation fees**: A portion of recovered collateral on eligible liquidations.
* **Buffer-tier withdrawal fees**: Temporary, stepwise fees during low-buffer states to slow runs.
* **Minor sources**: Keeper-fee surplus (if any), plus governance-approved integration/listing fees.

### 8.2 Revenue Sharing & Treasury Policy

Early on, the system favors liquidity depth; as buffers and uptime targets are met, the protocol’s share phases in—always through public timelocks.

**LP bias at bootstrap**. Up to 100% of trading revenue can be routed to LPs to accelerate depth and reduce slippage.\
**Phased protocol share**. Treasury participation increases only after predefined milestones (buffer thresholds, uptime, audit gates).\
**Use of funds**. Engineering, independent audits, monitoring/telemetry, security backstop rewards, incident reserves, and ecosystem grants. Periodic reports summarize flows and balances and are mirrored on public dashboards.

### 8.3 Sustainability Considerations

Competitiveness and safety move together via data-driven adjustments. Stress tests simulate OI skews, jump gaps, and oracle lapses to inform parameter updates. Economic knobs—profitFeeRate, counterSkewCap, liquidatorBounty, deviationGuard—are banded and adjusted via timelock as markets mature. Hedging follows a published policy to ensure expected downside reduction exceeds cost; if economics worsen, hedging can be paused. Transparency is enforced through public metrics for fee flows, LP share, treasury runway, and Security Module health.

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