Revenue Sharing is a business model or agreement where earnings or profits generated from a particular activity, product, or service are distributed among multiple stakeholders, contributors, or participants according to predefined terms. It allocates economic benefits across a network.
Mechanism
In crypto, this can involve smart contracts automatically distributing a percentage of protocol fees, trading commissions, or application revenue to token holders, liquidity providers, or network validators. Distribution rules are often immutable and transparent on-chain, ensuring verifiable and automatic disbursement.
Methodology
Strategic implementation aims to align incentives among ecosystem participants, fostering network growth, liquidity provision, and active governance. This model often functions as a key component of a project’s tokenomics, providing a direct economic benefit to those who contribute to the system’s success or hold its native assets, thereby sustaining participation.
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