Fee Distribution

Understanding how fees flow through the RedCarpetHQ ecosystem helps you appreciate the platform's sustainability and your role as a producer.

FeeDistributor Contract

The FeeDistributor is the central hub for all protocol fees, implementing a fixed 40/40/10/10 split.

Fee Sources

1. Trading Fees (Market Contract)

2.5% of every trade

Collected on token trades

Note: Minimum trade size is 1 USDC (MIN_TRADE_SIZE = 1e6) to prevent dust spam.

Largest fee source

2. Interest Income (UnifiedVault)

Protocol's share of interest

Risk-tiered percentages

From borrower payments

Distribution Split

``┌─────────────────────────────────────────┐ │ FeeDistributor (100%) │ ├─────────────────────────────────────────┤ │ │ │ ┌───────────────────────────────────┐ │ │ │ Protocol Treasury (40%) │ │ │ │ - Platform development │ │ │ │ - Security audits │ │ │ │ - Infrastructure │ │ │ │ - Team operations │ │ │ └───────────────────────────────────┘ │ │ │ │ ┌───────────────────────────────────┐ │ │ │ Trading Contest (40%) │ │ │ │ - Trader rewards │ │ │ │ - 6-hour epochs │ │ │ │ - Pro-rata distribution │ │ │ │ - First claimer bounty │ │ │ └───────────────────────────────────┘ │ │ │ │ ┌───────────────────────────────────┐ │ │ │ UnifiedVault (10%) │ │ │ │ - Protocol's vault allocation │ │ │ │ - Earns lending interest │ │ │ │ - Compounds over time │ │ │ │ - Used for Producer Exit │ │ │ └───────────────────────────────────┘ │ │ │ │ ┌───────────────────────────────────┐ │ │ │ Producer (10%) │ │ │ │ - Token creator reward │ │ │ │ - Claimable anytime │ │ │ │ - Passive income │ │ │ │ - Long-term alignment │ │ │ └───────────────────────────────────┘ │ │ │ └─────────────────────────────────────────┘`



Trading Fee Flow

Example Trade

Trade Details:`Buyer: 0xAAA... Seller: 0xBBB... Token: FRONTIER Amount: 1,000 tokens Price: $1.00 per token Total: $1,000`

Fee Calculation:`Trade Value: $1,000 Fee Rate: 2.5% Total Fee: $25

Seller receives: $975 ($1,000 - $25) Buyer pays: $1,000 (fee included in price)`

Fee Distribution:`$25 total fee collected:

1. Protocol Treasury: $10 (40%) → FEE_SAFE_ADDRESS 2. Trading Contest: $10 (40%) → Contest contract (current epoch) 3. UnifiedVault: $2.50 (10%) → Protocol's vault shares 4. Producer: $2.50 (10%) → Pending producer rewards`



Automatic Distribution

On Every Trade:
1. Market contract collects fee
2. Calls FeeDistributor.distributeFees()
3. Splits according to 40/40/10/10
4. Sends to respective destinations
5. Emits FeesDistributed event

Gas Efficiency:
Single transaction

Atomic distribution

No manual intervention

Transparent on-chain


Producer Rewards (10%)

Earning Producer Fees

Automatic Accrual:`Your Token: FRONTIER Total Trading Volume: $100,000 Total Fees Collected: $2,500 (2.5%) Your Share (10%): $250

Status: Claimable`

Per-Epoch Tracking:`Epoch 1: $25 fees → $2.50 to you Epoch 2: $30 fees → $3.00 to you Epoch 3: $20 fees → $2.00 to you Total: $75 fees → $7.50 claimable`



Claiming Producer Rewards

Via Platform:
1. Navigate to campaign management
2. Click "Fees Collected" tab
3. View claimable amount
4. Click "Claim Producer Rewards"
5. Confirm transaction
6. Receive USDC

Via Contract:`solidity UnifiedVault.claimProducerReward(tokenAddress)`

Example:`Token: FRONTIER (0x123...) Claimable: $250 USDC Gas Cost: ~80,000 gas



Transaction:
Function: claimProducerReward()

Contract: UnifiedVault (Token specific)

Result: $250 USDC to your wallet

Event: ProducerRewardClaimed



Claiming Strategy

When to Claim:

Frequent (Weekly):
✅ Regular income

✅ Lower risk

❌ Higher gas costs


Batched (Monthly):
✅ Lower gas costs

✅ Larger amounts

❌ Delayed income

Threshold-Based:`If claimable > $100: Claim rewards Else: Wait for more accumulation`



Producer Fee History

Tracking:`Total Fees Earned: $1,250 Total Claimed: $1,000 Pending: $250 Claim Count: 10 claims Average Claim: $100 First Claim: Feb 1, 2025 Last Claim: Mar 15, 2025`

Per-Epoch Breakdown:`Epoch | Fees | Your Share | Status ------|------|------------|-------- 1 | $25 | $2.50 | Claimed 2 | $30 | $3.00 | Claimed 3 | $20 | $2.00 | Claimed 4 | $35 | $3.50 | Pending 5 | $40 | $4.00 | Pending`



Interest Income Distribution

From UnifiedVault

Interest Split (Risk-Tiered):

GREEN Tier:`$100 interest earned: ├─ $4 → Protocol (4%) ├─ $6 → Insurance Fund (6%) └─ $90 → Lenders (90%)

Protocol's $4 → FeeDistributor`

YELLOW Tier:`$100 interest earned: ├─ $6 → Protocol (6%) ├─ $9 → Insurance Fund (9%) └─ $85 → Lenders (85%)

Protocol's $6 → FeeDistributor`

RED Tier:`$100 interest earned: ├─ $10 → Protocol (10%) ├─ $15 → Insurance Fund (15%) └─ $75 → Lenders (75%)

Protocol's $10 → FeeDistributor`



Interest Fee Distribution

Same 40/40/10/10 Split:`Protocol interest: $10

Distribution: ├─ $4 → Protocol Treasury (40%) ├─ $4 → Trading Contest (40%) ├─ $1 → UnifiedVault (10%) └─ $1 → Producer (10%)`



Why This Matters:
More borrowing = more interest

More interest = more producer income

Healthy DeFi = passive income

Long-term sustainability


Contest Distribution (40%)

How Contest Fees Work

Fee Collection:`Trading fees collected per epoch: Epoch 1: $100 → $40 to Contest Epoch 2: $150 → $60 to Contest Epoch 3: $200 → $80 to Contest`

Prize Pool:`Epoch 3 Prize Pool: $80



Qualified Traders:
Trader A: 50,000 USDC volume (50%)

Trader B: 30,000 USDC volume (30%)

Trader C: 20,000 USDC volume (20%)


Distribution:
Trader A: $40 (50%)

Trader B: $24 (30%)

Trader C: $16 (20%)

First Claimer Bounty: $0.80 (1%)`



Why 40% to Traders:
Incentivizes trading activity

Creates liquidity

Rewards active participants

Sustainable ecosystem


Protocol Treasury (40%)

Usage

Platform Development:
Smart contract development

Frontend improvements

New features

Bug fixes


Security:
Smart contract audits

Security monitoring

Incident response


Infrastructure:
Server costs

API services

Database hosting

CDN and storage


Operations:
Team salaries

Legal compliance

Marketing

Community management


Transparency

Treasury Address:`FEE_SAFE_ADDRESS: [Address] Balance: Publicly viewable Transactions: On-chain Usage: Documented`



Governance (Future):
Community input

Transparent spending

DAO structure (potential)

Stakeholder alignment


Vault Allocation (10%)

Protocol's Vault Position

Purpose:`10% of fees → UnifiedVault deposits Earns lending interest Compounds over time Used for Producer Exit feature`

Example:`Month 1: $100 fees → $10 deposited Month 2: $150 fees → $15 deposited Month 3: $200 fees → $20 deposited

Total Deposited: $45 Interest Earned: $2 Total Value: $47`



Producer Exit Strategy

Burn for Vault Shares:`Producer wants to exit: 1. Burns own tokens 2. Receives protocol's vault allocation 3. No market impact 4. Fair value exchange



Requirements:
Minimum $10 threshold

25% exit fee

Only protocol's shares

Doesn't affect other holders

Example:`Protocol's vault shares: $10,000 Producer burns: 10% of supply Producer receives: $1,000 worth of shares Exit fee (25%): $250 Net to producer: $750`



Fee Tracking

For Producers

Dashboard Metrics:`Your Token: FRONTIER



Trading Fees:
Total Collected: $2,500

Your Share (10%): $250

Claimed: $200

Pending: $50


Interest Fees:
Total Collected: $500

Your Share (10%): $50

Claimed: $40

Pending: $10

Total Earnings: $300 Total Claimed: $240 Total Pending: $60`



Historical Data

Monthly Breakdown:`Month | Trading | Interest | Total | Claimed ---------|---------|----------|-------|-------- Jan 2025 | $50 | $10 | $60 | $60 Feb 2025 | $75 | $15 | $90 | $90 Mar 2025 | $125 | $25 | $150 | $90 Total | $250 | $50 | $300 | $240`



Analytics

Fee Trends:`Week 1: $25 fees Week 2: $30 fees (+20%) Week 3: $35 fees (+17%) Week 4: $40 fees (+14%)

Trend: Growing ✅ Average: $32.50/week Projected Monthly: $130`



Maximizing Producer Income

Strategies

1. Increase Trading Volume
Engage community

Post regular updates

Create trading incentives

Build excitement


2. Encourage DeFi Usage
Promote lending pools

Explain borrowing benefits

Share APY rates

Educate holders


3. Long-Term Thinking
Sustainable growth

Community building

Quality over quantity

Aligned incentives


4. Regular Claims
Claim strategically

Consider gas costs

Reinvest if desired

Track for taxes


What NOT to Do

Avoid:
❌ Wash trading (detected and penalized)

❌ Price manipulation

❌ Fake volume

❌ Misleading community


Consequences:
Risk tier elevation

Reduced trading

Community loss

Platform penalties


Tax Considerations

For Producers

Producer Fees as Income:
Likely taxable

Report as business income

Track all claims

Consult tax advisor

Record Keeping:`Date | Amount | Transaction Hash -----------|--------|------------------ 2025-02-01 | $50 | 0x123... 2025-03-01 | $75 | 0x456... 2025-04-01 | $100 | 0x789...``

Documentation:

Claim transactions

Fee statements

Annual summaries

Tax forms (if required)

Comparison to Traditional Models

Traditional Crowdfunding

Kickstarter/Indiegogo:

Platform fee: 5-10%

Payment processing: 3-5%

Total: 8-15%

No ongoing income

RedCarpetHQ:

Campaign creation: Gas only

Trading fee: 2.5% (not paid by producer)

Producer share: 10% of fees (income!)

Ongoing passive income

Traditional Film Financing

Studio/Investor Model:

Producers: 2-5% of profits

After recoupment

Complex accounting

Delayed payments

RedCarpetHQ:

Producers: 10% of trading fees

Immediate accrual

Transparent on-chain

Plus potential dividends

Future Enhancements

Potential Changes

Governance:

Community voting on fee splits

Adjustable parameters

Transparent proposals

Additional Revenue:

Premium features

Advanced analytics

White-label solutions

Partnership revenue

Optimization:

Gas efficiency improvements

Batch claiming

Auto-compounding

Yield strategies

Next Steps:

Understand DeFi Architecture →

Learn About Risk Tiers →

Explore Campaign Economics →