Revenue Distribution

All trading fees from Avantis go towards liquidity providers and the protocol treasury
There are three major sources of revenues in Avantis:
  1. 1.
    Trading fees: Dynamic open fees, close fees and margin-fees, as explained in detail in the fees section
  2. 2.
    Vault Deposit / Withdraw fees: LPs may be charged a deposit or withdraw fee, which varies based on the protocol health and an LP's lock duration. These are explained in detail in the risk management section

Liquidity Providers

LPs represent the supply side of the protocol, and are hence compensated for the work they put in as market makers. Initially, LPs will receive 80% of the protocol fees, which represents the highest revenue share across any margin-based perpetuals platform in DeFi (see table below for reference)
Liquidity Providers - Fee Share
Level Finance
Gains Network
<35% (mostly going to token / NFT holders)
Synthetix (Kwenta)
<40% (lower because LPs need to rely on sUSD, which is over-collateralized by SNX)
MUX Protocol
<70% (lower because of protocol owned liquidity)

Protocol Treasury: Liquidity

A portion of the protocol treasury will go towards everything related to protocol liquidity. This includes protocol owned liquidity for the USDC vault, sponsoring trading competitions, giving trader rebates, sponsoring gas, and insuring LPs in case of unforeseen protocol losses. Initially, the team will direct this revenue, however over time, the DAO can vote on splitting this liquidity as it sees fit.

Protocol Treasury: Development Fund

A portion of the protocol treasury will go towards paying core contributors to continue developing the Avantis protocol, and all composable protocols launched by Avantis Labs, the parent entity of the Avantis protocol.