Are you an LLM? Read llms.txt for a summary of the docs, or llms-full.txt for the full context.
Skip to content

9. Economics for LPs

9.1 Revenue Streams

  1. Network Fee Rake → Policy Pools. A portion of per-pool fees is routed to the CLC Pool via the Waterfall contract which starts with Insurance, Core Ops, Liquidity Mandates, and (if, when, and to the extent enabled) sCLC swap windows.
  2. Policy-gated fee-credit (ex-post)
  3. Routing Fees: Fees from multi-hop routes discovered by routers.
    1. Rebalancing / Netting Fees (optional): Fees earned for executing batch netting cycles and inventory rebalancing routes that reduce imbalance and increase successful settlement throughput (ex-post, policy-bound).
  4. Curation & Validation Fees: pools may allocate a disclosed portion of fees to listing/verification/monitoring roles (curators, auditors, claims modules) under published mandates.

9.2 Illustrative Fee Math (Example Only)

  • Per-pool usage fee: 30–500 bps depending on voucher class and risk tier.
  • Network rake: 10–30% of per-pool fees -> Waterfall -> CLC Pool.
    • Worked example ( “2% fee” case). If a pool charges f_p = 2.00% and the DAO rake share is r_p = 20% of that pool’s fees, then the effective network fee rate on routed value is:
    • τ_p = f_p · r_p = 2.00% · 20% = 0.40% = 40 bps.
    • Convertibility matters. If only χ = 25% of fee inflows are cash-eligible/convertible (E_cash), then cash-usable effective revenue is ~10 bps (40 bps × 0.25). Therefore, meaningful sCLC fee-access budgets (F_epoch) require both high settlement throughput and sufficient χ; otherwise F_epoch may remain zero for long periods.
  • Routing fee: 5–20 bps across hops.
  • Distribution to Waterfall (policy-bound)
  • Net LP Credit Access drivers: local swap usage, routing volume, DAO-deployed liquidity credit access, less losses/insurance haircuts.

Accounting only: Any annualized figures are ex-post metrics of policy-gated swap access to pooled fees (not promised returns) and may be zero or negative after losses/haircuts.

Downside Examples (ex-post):
  • Inventory Loss Case: losses from defaults/redemption delays reduce fee-credit access by X (haircut).
  • Run-Protection Case: limiter-triggered throttling reduces settlement flow, lowering F temporarily.
  • Policy Case: governance sets fee-credit budget F_epoch = 0 (no sCLC exit) during incidents or rebuild phases.

Numerical schedules are governance parameters and will be finalized via on-chain proposals and timelocks.