Revenue Model

2.1 Borrowing Fees

Dynamic Fee Structure

Borrowing fees are calculated based on real-time factors, including pool utilization rates, asset volatility, and borrower risk profiles. This dynamic approach ensures fair and market-reflective fees.

Fee Distribution

Collected fees are allocated among:

• Liquidity providers (as part of their interest earnings).

• The protocol treasury (for development and maintenance).

• The insurance fund (for risk mitigation).

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2.2 Interest Rate Spread

Protocol Earnings

Nebula captures a small spread between the interest rates paid by borrowers and those earned by suppliers. This contributes to protocol revenue without imposing significant costs on users.

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2.3 Liquidation Penalties

Penalty Allocation

When a borrower's collateral is liquidated due to under-collateralization, a penalty fee is imposed. Portions of this fee are directed to:

• The insurance fund.

• The protocol treasury.

• Token buyback and burn operations.

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2.4 Protocol Treasury

Funding Initiatives

The treasury finances ongoing development, security audits, marketing efforts, and ecosystem growth projects. This ensures the protocol can evolve and adapt to market needs.

Transparent Governance

Expenditures from the treasury are subject to governance approval, ensuring that funds are allocated in a manner consistent with the community's interests.