Revenue Redistribution
Overview
Seneca redistributes protocol revenues to sSEN holders as real yield.
Revenue-sharing includes:
Trading tax (WETH)
Borrow fees
Interest accrued by open positions
Protocol share of liquidation fees.
Breakdown
Borrowing fees and interest rates vary by Chamber. Fees for high-demand Chambers are typically higher.
Protocol revenue increases proportionally with TVL (interest accrued) and new positions (borrow fees).
The protocol receives 10% of total liquidation fees, with the rest charged by the users carrying out the liquidations. These fees are also incorporated into the fee-sharing structure.
Two percent of total trading volume is included in the revenue share as WETH via trading tax redistribution.
Fee-sharing
Users can stake their SEN tokens to gain access to revenue-sharing through sSEN.
sSEN can be redeemed for an increasing amount of SEN tokens. The growth rate is entirely determined by protocol revenue (real yield).
Revenues are converted to SEN and allocated to the sSEN staking contract. This process also determines additional buying pressure for SEN.
Seneca does not require any direct incentives for CDP openings. The platform's growth proceeds independently from the native token's price, solely driven by market demand and senUSD liquidity depth.
Conversely, the platform's growth positively drives the demand for the native token, with SEN and sSEN becoming proportionally more appealing as protocol performance and revenues grow.
On the other hand, as the platform grows, the demand for SEN and sSEN may increase, making them correspondingly more desirable as protocol performance and revenues grow.
At a later date, sSEN holders will be able to collateralize their tokens in designated Chambers. They will be able to borrow senUSD or leverage their assets while their loan is self-repaying thanks to the growth in sSEN value.
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