Protocol Fees
SWOPs Fees Generation
Swop's is designed to create a sustainable and efficient ecosystem by generating fees (at a competitive rate) through multiple streams tied to its phygital (physical-digital) transaction infrastructure. These fees not only support the platform’s operations but also enhance liquidity for the benefit of the community, particularly liquidity pool providers.Fee Sources
Phygital Transactions Fees are generated from transactions that bridge physical and digital assets. These fees are directed entirely to liquidity pool providers, ensuring a steady flow of rewards for those supporting the ecosystem’s liquidity. This also goes towards protecting the ecosystem from chargebacks in a industry where the norm is 3% of all transactions are chargebacks.
User Swapping When users swap assets within the SWOPs platform, a fee is applied. This fee contributes to both operational sustainability and liquidity enhancement, aligning the interests of users and liquidity providers.
On/Off-Ramping SWOPs facilitates seamless entry and exit between fiat and digital assets, charging a 0.5% fee for on/off-ramping transactions. Of this fee:
0.25% is allocated to the Bridge for facilitating these services, ensuring reliable and secure conversions.
0.25% is retained by SWOPs to cover operational costs and bolster the ecosystem.
Fee Allocation and Liquidity Flow
Swop's operates with a lean cost structure, incurring monthly expenses of $9,000 to maintain its infrastructure and services. The portion of fees retained by SWOPs (primarily from on/off-ramping) first covers these operational costs. Once expenses are met, all remaining funds are directed to the liquidity pool. This mechanism ensures that excess revenue directly strengthens the platform’s liquidity, benefiting providers and enhancing the overall stability and depth of the ecosystem.
A Self-Sustaining Model
By channeling fees from phygital transactions, swaps, and on/off-ramping into liquidity pools after covering minimal operational needs, SWOPs creates a self-reinforcing cycle. Liquidity pool providers are incentivized through direct fee distribution, while users benefit from a robust and liquid marketplace. This fee generation and allocation strategy underscores SWOPs’ commitment to fostering a thriving, community-driven phygital economy.
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