Section

13. Fee Distribution Flow

Part of the MSV Protocol Documentation

MSV Protocol Documentation

Generated: 2025-08-25 22:06:44

13. Fee Distribution Flow

The MetaSoilVerse Protocol ($MSVP) employs a dynamic, modular fee distribution system that aligns economic incentives with long-term sustainability, ecosystem growth, and token utility. This model ensures that every transaction , whether asset onboarding, leasing, staking, yield redemption, or cross-chain operations , contributes to the protocol’s health through smart contract-governed logic trees.

13.1 Fee Sources

Fees are levied at various protocol interaction points, including:

• Asset Tokenization Fee Charged during the RWA onboarding process to cover oracle attestation and NFT/SFT minting gas.

• Leasing Fee A percentage of yield generated from real-world leasing flows (e.g., factory, real estate, solar panel).

• Vault Exit Fee Slippage-reserve withdrawal fee applied on early exits from staking/yield vaults.

• Cross-Chain Messaging Fee Charged during L0 bridge interactions (LayerZero/Axelar).

• Governance Proposal Fee Collected when submitting proposals to reduce spam and align voting power with stake.

13.2 Fee Routing Logic

All collected fees are routed using a smart contract-based transaction logic tree . This logic ensures deterministic, real-time allocation across multiple protocol components.

Transaction Fee Flow (Tx)

Let:

• F_tx = Total transaction fee (in $MSVP)

• F_burn = Portion to be permanently burned

F_treasury = Portion sent to the protocol treasury

• F_referral = Portion rewarded to referrer (if any)

• F_vault = Portion injected into staking vault as yield

The system satisfies the following invariant:

F_tx = F_burn + F_treasury + F_referral + F_vault

Default Distribution (configurable via governance):

Component	% of Fee	Functionality
Burn	20%	Permanent supply reduction (deflationary)
Treasury	30%	Operational and ecosystem expenses
Referral	15%	Community growth via on-chain referrals
Vault Rewards	35%	Recycled into staking & leasing yield vaults

13.3 Fee Distribution Logic Tree (Simplified)

• Smart contracts handle all allocations in a single atomic call.

13.4 Referral Fee System

The multi-level referral mechanism tracks wallet-based referrals via Merkle tree registration. Upon transaction, the smart contract dynamically checks referral lineage and assigns rewards proportionally:

• Level 1: 10%

• Level 2: 5%

If no referral is detected, the corresponding percentage is re-routed to vault pools .

13.5 Deflationary Design

The burn component ensures that every protocol transaction reduces the effective circulating supply , creating upward price pressure as protocol activity increases.

Let:

• T = Total supply = 100B MSVP (fixed)

• B_t = Total burned at time t

• C_t = Circulating supply = T - B_t - Vested

Every transaction contributes:

C_t+1 = C_t - F_burn

Over time, this dynamic introduces automated scarcity aligned with usage volume , similar to EIP-1559 in Ethereum but tailored for asset-based economies.

13.6 Governance-Controlled Fee Parameters

• Fee % splits can be rebalanced by MSVP DAO through proposals and votes.

• Burn %, Referral %, and Vault Reward % can be adjusted per sector.

Example: Carbon Credit sector may set 50% to burn due to green alignment.