Liquidity Providers play a crucial role in sustaining the liquidity of the $A51 token ecosystem. In recognition of their contributions, they are compensated through a well-designed revenue distribution model.
LP Revenue Distribution
A51 charges a fee to the LPs who use A51 to provide liquidity.
Half of the collected fees (50%) are used by the protocol to acquire wETH (Wrapped Ether). This wETH is subsequently distributed to those who have staked their A51 tokens, serving as a reward mechanism.
Protocol Net Revenue
The remaining 50% of the fees make up the Protocol Net Revenue. This portion is used by the protocol to buy back A51 tokens from the open market. This action creates buying pressure and serves as a countermeasure against inflation.