Revenue & Fees

Blot Protocol generates revenue from every user interaction with its leveraged token products. Every dollar comes from actual protocol usage — there are no speculative revenue sources.

Revenue Streams

Minting Fees (0.1–0.3%)

Charged when a user deposits USDC/USDT0 to create a new leveraged token position. A user depositing $10,000 to mint ETH-3X pays $20–30 in fees.

Redemption Fees (0.1–0.3%)

Charged when a user burns leveraged tokens to withdraw their underlying value. A user redeeming $12,000 worth of ETH-3X pays $24–36 in fees.

Management Fees (2% annually)

Taken continuously from the NAV of all outstanding leveraged tokens. This accrues passively as long as tokens exist. $10M in outstanding leveraged tokens generates $200K per year automatically.

BlotSwap Trading Fees

Every swap on BlotSwap generates a 0.3% fee. Of that, the protocol retains 0.05% (the rest goes to LPs). Most users trade leveraged tokens on the DEX rather than minting/redeeming directly, making this a high-frequency revenue source.

Rebalance Spread

A small spread is captured during the daily leveraged token rebalance process. More volatile days mean larger position adjustments and more spread captured.

Fee Distribution

All protocol revenue follows a simple split:

Protocol Revenue (100%)
    │
    ├── 80% → veVOID Holders
    │         Distributed weekly in USDT0
    │         Proportional to veVOID balance
    │
    └── 20% → Team Treasury
              Funds development, ops, infrastructure

LP fees are separate and go directly to liquidity providers. The 80/20 split applies only to protocol-level revenue — mint/redeem fees, management fees, protocol share of DEX fees, and rebalance spreads.

Products Generating Revenue

Leveraged Tokens (Core Product)

Tokenized leveraged positions backed by Nado perpetual futures on Ink.

Each leveraged token is an ERC-20 minted as a LayerZero OFT (omnichain fungible token), bridgeable to any chain from day one. Behind the scenes, the protocol manages a perpetual position on Nado. Daily rebalancing handles risk — losses deleverage automatically, gains compound. Users never face liquidation or margin calls.

BlotSwap (DEX)

AMM DEX on Ink for trading leveraged tokens and ecosystem assets. Standard V2 AMM pools with gauge-directed Drips emissions for LPs. Arbitrageurs keep leveraged token prices on BlotSwap tight to NAV through mint/redeem loops, creating constant trading volume and fee generation.

Future Products

The Flywheel

This is where the token stack creates compounding value. Every layer feeds the next.

Users mint leveraged tokens on Blot
        │
        ▼
Fees generated (mint, redeem, management, DEX, rebalance)
        │
        ▼
80% of fees flow to veVOID holders
        │
        ▼
High real yield attracts more veVOID lockers
        │
        ▼
To get veVOID, users need VOID
        │
        ▼
To get VOID, users burn BLOT + Drips
        │
        ▼
BLOT supply decreases → BLOT appreciates
        │
        ▼
To get BLOT, users burn FROTH (10,000:1, one-way)
        │
        ▼
FROTH supply tightens permanently across all chains
        │
        ▼
More attention → more users → more leveraged token activity
        │
        ▼
(cycle repeats)

The Complete Journey

A user wants to earn protocol fees from Blot. Here's the full path:

• Acquire FROTH — Buy FROTH on Flow, Abstract, or Ethereum
• Bridge to Ethereum — If on Flow or Abstract, bridge FROTH to Ethereum via deBridge
• Burn FROTH for BLOT — Burn 10,000 FROTH through the FROTHBurner contract. Receive 1 BLOT on Ink. FROTH is permanently gone.
• Earn Drips — Stake BLOT single-sided, provide LP on BlotSwap, or mint and hold leveraged tokens. All generate Drips.
• Mint VOID — Burn accumulated BLOT + Drips to mint VOID
• Create veVOID — Pair VOID with WETH on BlotSwap. Lock the LP tokens to create a veVOID position.
• Earn — Collect weekly protocol fee distributions in USDT0. Vote on gauge emissions. Collect bribes.

At every step, the user has committed more deeply. And at every step, supply of the tokens below has decreased. FROTH is burned. BLOT is burned. VOID is locked. The system gets tighter.

Key Takeaways

• No inflation. Every token in the stack is either burned to create the next layer or is supply-capped by FROTH availability. No emissions, no dilutive unlocks.
• Real yield. Protocol fees come from actual product usage — minting, redeeming, trading, and managing leveraged positions.
• Compounding scarcity. Every participant permanently reduces FROTH supply. Every VOID minter permanently reduces BLOT supply. The system only gets tighter over time.
• Multichain impact. Blot success on Ink directly benefits FROTH holders everywhere. One flywheel powers the entire ecosystem.