# Economics

The SVM protocol charges fees that are shared between SVM token holders, the rewards pools and the treasury (see the distribution below).<br>

**Protocol Revenue:**

* Funds from the initial player token sale are held in the treasury but are used for liquidity provision
* 20% share of the staking fees
* 20% share of trading fees
* Free liquidity can be invested in third party DEFI protocols to generate yield<br>

**Protocol expenses:**

* 20% goes into the DAO treasury to fund DAO operations
* 40% is used to pay rewards to SVM stakers
* 30% is used to burn SVM tokens<br>

**Reward Pools revenue:**

* Fees charged for staking
* The treasury provides liquidity for the DEX, which generates additional revenue from trading fees
* Extra allocations from the treasury

**Reward Pools expense:**

* 20% transferred to protocol treasury
* 50% used to pay performance payouts to staked token holders
* 30% used to buy back an burn palyer tokens

There is a separate reward pool for each competition. A Reward pool only collects fees from players that belong to that competition.