# Protocol Economics & Fees

## Tokenization & RWA Index

{% tabs %}
{% tab title="Rental Income" %}
RAAC takes a protocol fee on the rental income flowing through its ecosystem which is used to help maintain the physical real estate:

* 80% will go to secondary RWA gauge which directs rewards to LPs in the RcvrUSD/DEcrvUSD and $iREET/crvUSD liquidity pool (or other gauges in the future)
* 20% will go to pay for software development, professional services, and administration (Protocol Services).
  {% endtab %}

{% tab title="Royalty Fees" %}
Trades on REET NFTs are subject to a 2% royalty fee on every trade, which is distributed as follows:

* 0.5% to $veRAAC holders
* 0.5% to Protocol Services
* 1% to RAAC’s Treasury
  {% endtab %}

{% tab title="$iREET Minting Fee" %}
Whenever a user adds a REET NFT to the RWA Index, 2% of the minted $iREET is allocated to the RAAC Treasury.
{% endtab %}

{% tab title="$iREET Token Tax" %}
$iREET, the tokenized share of the RWA Index, comes with a 2% token tax, similar to the 2% royalty fee of REET NFTs.

Revenue generated via the token tax is distributed as follows:

* 0.5% to $veRAAC holders
* 1% to Protocol Services
* 0.5% to the RAAC Treasury
  {% endtab %}
  {% endtabs %}

***

## RAACLend

{% hint style="info" %}
All revenues from the RAAC money market (DeFi platform revenue) are split in the following way:

* 80% $veRAAC holders
* 20% RAAC Treasury
  {% endhint %}

Said revenue is generated from the sources described in this section, below.

{% tabs %}
{% tab title="Interest Rate Spread" %}
RAAC takes a 10% fee on the interest paid by borrowers. The same 10% fee will be deducted from the interest paid by borrowers, such that lenders will receive a net return equal to 90% of the interest paid by borrowers.
{% endtab %}

{% tab title="Liquidation Guard Fees" %}
Borrowers can guard their REET NFT collateral from instant liquidation (get 72 hours to repay their loan after the liquidation threshold is reached) for a fee equal to 3% of their loan.
{% endtab %}

{% tab title="Mint Fees" %}
Deploying to a lending vault is subject to a 0.05% fee on deployment. Minting fees may be subject to change in the future.
{% endtab %}

{% tab title="Vault Fees" %}
There are no fees to open a vault to borrow.
{% endtab %}

{% tab title="Liquidation Fees" %}
RAAC receives a 2.5% fee on liquidations by receiving 2.5% of index tokens minted during the liquidation process. The fees are sent to the RAAC Treasury.
{% endtab %}
{% endtabs %}

***

## RWf(x)

The RAAC Treasury receives 10% of each silo’s COD tokens, representing 10% of the RWA backing and 10% of RWA off-chain yield. Additionally, the RAAC Treasury receives 40% of on-chain yield generated by a silo’s treasury-backed stablecoin.

\
A 2% mint fee is charged and distributed between ecosystem partners.


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