2 - Protocol Revenue & Treasury Management

2.1 Protocol Fees

The PACT protocol is designed to generate protocol fees on services such as loan origination and securitization of real-world assets (RWAs). These fees may be paid in stablecoins or fiat and will accrue to the protocol treasury to support ongoing operations, development, and ecosystem initiatives. A number of implementations may be set by governance.  For example, a loan origination fee (ranging from 0.15–2.5% of the loan amount, depending on volume) may be proposed via governance. Future proposals may include fees for securitization or token distribution logistics.

All fee structures and their use are subject to community governance and may evolve over time based on the protocol’s needs and ecosystem feedback.

2.2 - Treasury Operations and Token Sink Mechanisms

The DAO may propose treasury operations to promote sustainable network growth and long-term alignment among participants. These may include token sink mechanisms—such as token redemptions, auctions, or treasury-based market participation—aimed at supporting the utility and long-term participation alignment of the $PACT token. Any such operations would be discretionary and governed by proposal and vote.

A governance proposal at launch may suggest allocating a portion of net protocol fees (after covering operational expenses) toward such treasury operations. This could include mechanisms like token redemptions or community grants. No mechanism is guaranteed, and all allocations are determined through transparent, community-led governance processes.