Fee Distribution

Once PepperDEX is launched, the PEP token will become eligible to be staked to the network. PEP stakers will receive 30% of the total fees generated by the entire PepperDEX platform in USDC. A complete breakdown of how fees are distributed can be seen below:

Fee Distribution

Hxro Network Transaction Fees

• 100% - USDC distributed to HXRO stakers

DEX Transaction Fees & oPEP Redemption Fees

• 30% - PEP Staking Rewards

• 30% - Protocol Owned Liquidity (POL) Temporary

• 20% - PEP Buyback and Max Stake

• 10% - HXRO Buyback and Stake with the Maximum Locking Period

• 10% - Referrals

  *For fees paid by unreferred traders, this 10% will go to PEP stakers.

**While transaction fees will take some time to generate, the design creates a virtuous cycle of liquidity with reflexivity.

***The PEP treasury will accumulate a staking position over time to provide runway for the DAO via staking rewards. This staked position will NOT participate in governance.

The POL will grow continually. Any rewards earned by the protocol from POL will be rolled back into the LP's initially. When we're confident that the LP is sufficient to support the market. The fees/rewards that are earned will go to the treasury. The use of these funds will be determined by the core contributors OR the DAO via governance when the time comes. It's possible that these fees are forwarded to stakers in this way. But it's not pre-planned, rather, it's to be determined.

PEP Staking Rewards

30% of DEX transaction fees plus oPEP redemption fees are allocated to PEP Stakers in USDC, distributing real yield to PEP stakers.

DEX-Based Fee Incentives for Traders & PEP Buyback

As previously mentioned, PepperDEX Perps & Futures are powered by Hxro Network's "Dexterity Protocol," which means deep, consistent liquidity for all users. PepperDEX will initially allocate 30% of all DEX transaction fees to the PEP POL up to $5m. POL will consist of a combination of pairs made up of ecosystem partners through the Ecosystem Liquidity Alignment Initiative. Once the $5m threshold has been reached, the revenue allocated to the PEP-based POL will be reallocated to a PEP buyback program. From that point forward, 10% of all fees generated by PepperDEX will be used to buy PEP on the open market. These PEP tokens will be redistributed to traders as trading incentives in the form of oPEP. By incentivizing traders in this way, PepperDEX will ensure the long-term health of the Pepper DAO treasury by driving more volume, thus, more fees through the DEX.