Protocol Revenue: Net Margin and LQ Buybacks

How is the protocol revenue distributed?

80% of all interest paid by the borrowers is immediately distributed to the suppliers who deposited the assets in Liqwid markets. Interest accrued increases the value of your qTokens in real time (continuously increasing qToken Exchange rate). The part of the value created which is not distributed to the suppliers is called the “Net margin”. Currently Net margin is set to 20%, with 50% of this 20% Net margin accruing to LQ stakers in the form of programmatic distributions and 50% to the DAO Treasury reserve. Function of Programmatic Distributions to LQ Stakers

The programmatic distributions represents the portion of the value created that's distributed back to LQ stakers. Function of the DAO Treasury reserve

The DAO treasury is collecting reserves to fund future protocol developments and fund developers building products that scale adoption across the Liqwid ecosystem.

LQ Buyback Program

LQ Buyback Program was approved in an onchain governance vote which specifies the full Net margin amount used to buyback LQ which is then distributed to LQ stakers and the Liqwid DAO treasury reserve.