Revenue Sources

This page goes into detail about how the protocol generates revenue and how revenue is distributed

Revenue is the lifeblood of any sustainable protocol, and in Rezerve, all revenue is funneled directly into buybacks and burns of RZR. This creates continuous demand for the token, raises the effective floor price, and ensures that holders capture the upside of protocol growth.

Rezerve’s revenues come from four primary sources:

1/ Trading fees on protocol-owned liquidity

The DAO owns the majority of its RZR-USDC and RZR-ETH liquidity positions on DEXes. Because the pools are deliberately concentrated around the prevailing price, they generate 2–10 bp per trade and capture most of the market’s swap volume.

Fees accrue in real time, are auto-compounded into the position, and then streamed to the treasury at epoch boundaries as raw USDC/ETH. This “always-on market-making desk” provides depth for traders while paying the protocol for the service.

2/ Lending Fees on USDC Reserves

Idle reserves are deployed into reputable lending markets (e.g., Aave, Morpho, Spectra) where they earn organic yield. This converts otherwise unused treasury capital into a steady cash flow, which can then be directed into buybacks.

For example, with billions in USDC under management, even low-risk lending at 3–6% APY provides a meaningful baseline revenue stream to cover operating costs and strengthen the protocol’s floor price.

3/ Staking Incentives from ETH

ETH is at the core of Rezerve’s strategy. By holding and staking ETH, the protocol earns validator rewards and staking yield.

With scale, this becomes a major source of recurring income: for example, a treasury holding of $3 billion in ETH could generate $120 million annually at a 4% APR.

This ETH-denominated revenue is especially powerful, since it aligns with Rezerve’s long-term thesis of being structurally long ETH.

4/ Harberger-tax stream

All staked positions self-declare a valuation and prepay a 5 % annual “ownership tax.” The tax drips into the treasury block-by-block, giving the protocol a bond-independent income floor even when trading volumes are thin.

Because users can be bought out if they understate, the mechanism stays honest while producing a predictable cash trickle.

Furthermore bond purchases also charge a 1% trading fee which goes towards the rising floor price.

See staking RZR and Harberger taxes.

How Revenue Flows Back to Holders?

Every unit of revenue is routed into RZR buybacks and burns. As trading fees, lending yield, and ETH staking income accumulate, the protocol systematically purchases RZR from the open market and removes it from circulation.

This creates:

• A rising floor price backed by real protocol earnings.

• A direct and transparent link between protocol success and tokenholder value.

By design, Rezerve avoids inflationary emissions or arbitrary dilution. Instead, it recycles genuine economic activity into demand for its native token, making RZR one of the few DeFi assets with a real, protocol-driven value capture mechanism.

Performance Fees

Unlike many protocols, Rezerve has no founder-minted tokens. Instead, the core team is compensated through a performance-based model tied directly to protocol revenue and success:

The performance fee is set as 10% of all bond sales and staking emissions. Bond sales grow only if the protocol attracts new users and staking emissions become valuable only if the protocol backing grows. This fee can be waived off at any time either by the holders through a governance proposal or by the team themselves.

This model ensures that the core team is incentivized to grow real protocol revenue, as their compensation is linked to actual economic activity rather than pre-mined allocations. Notably, this fee structure is significantly lower than the industry standard where hedge fund managers typically take a 20% performance fee.

By maintaining a leaner reward structure, Rezerve prioritizes protocol sustainability, user alignment, and fair upside distribution, while still ensuring long-term incentives for contributors.