Revenue Model
How Dualis Finance generates and distributes protocol revenue
Dualis Finance generates revenue through five distinct streams, each tied to a core protocol function. Revenue flows into the protocol treasury, where it is allocated between operational reserves, DUAL staker rewards, and ecosystem development. The diversified revenue model ensures protocol sustainability across varying market conditions and reduces dependence on any single source.
Revenue Streams
The following table outlines each revenue stream, its source, and how it contributes to the protocol's financial sustainability.
| Revenue Stream | Source | Description |
|---|---|---|
| Reserve Factor | Borrower interest | A percentage (5-20%) of all interest paid by borrowers is retained as protocol revenue. This is the primary and most consistent revenue stream. |
| Flash Loan Fees | Flash loan borrowers | A 0.09% fee on every flash loan transaction. Revenue scales with flash loan volume and is collected atomically. |
| Securities Lending Fees | Securities borrowers | Commission of 5-20 bps on institutional securities lending transactions through the marketplace. |
| Institutional Pool Fees | Institutional participants | Management and performance fees on dedicated institutional lending pools with custom risk parameters. |
| Credit Oracle API | External integrators | Subscription and per-query fees for third-party access to Dualis credit scoring and risk assessment data. |
Reserve Factor Revenue
The reserve factor is the protocol's primary revenue mechanism. When borrowers pay interest on their loans, a configurable percentage is retained by the protocol instead of being distributed to suppliers. The reserve factor varies by asset -- from 5% for low-risk tokenized treasuries (T-BILL) to 20% for Canton Coin (CC).
For example, if a pool accrues 100,000 USDC in borrower interest over a period and the USDC reserve factor is 10%, the protocol retains 10,000 USDC while distributing 90,000 USDC to suppliers. This mechanism ensures that the protocol accumulates reserves proportional to lending activity.
Flash Loan Revenue
Flash loan fees generate revenue on a per-transaction basis. The 0.09% fee is applied to the borrowed principal and is collected within the same atomic transaction. Flash loan revenue is highly variable and correlates with arbitrage opportunities, liquidation activity, and market volatility. During high-activity periods, flash loan fees can represent a significant portion of total protocol revenue.
Securities Lending Revenue
The institutional securities lending marketplace generates commission revenue of 5 to 20 basis points on each transaction. This revenue stream is unique to Dualis and reflects the protocol's positioning at the intersection of traditional finance and decentralized lending. As the tokenized securities market grows, this stream is expected to become increasingly significant.
Institutional Pool Revenue
Dedicated institutional pools operate with custom fee structures negotiated with institutional counterparties. These pools may include management fees (charged as a percentage of assets under management), performance fees (charged on excess returns), or flat subscription fees. Revenue from institutional pools provides a predictable, recurring income stream that is less sensitive to market volatility than retail lending activity.
Credit Oracle API Revenue
The Dualis Credit Oracle provides credit assessments and risk scoring data to external protocols and institutions. Third-party integrators can access this data through a subscription-based API with per-query pricing for high-volume consumers. The Credit Oracle monetizes the protocol's proprietary credit infrastructure and creates a network effect where more data improves scoring accuracy, which in turn attracts more subscribers.
Revenue Flow to Treasury
All protocol revenue flows into the unified protocol treasury. From the treasury, funds are allocated according to the current governance-approved distribution:
- 40% to DUAL stakers -- Distributed proportionally to staked DUAL holders as a reward for their economic commitment to the protocol.
- 30% to operational reserves -- Retained as a buffer against unexpected losses, insurance fund contributions, and day-to-day protocol operations.
- 20% to ecosystem development -- Funds grants, integrations, partnerships, and community initiatives that expand the Dualis ecosystem.
- 10% to security fund -- Dedicated to ongoing audits, bug bounty payouts, and security research to maintain the protocol's safety guarantees.
Long-Term Sustainability
The Dualis revenue model is designed for long-term sustainability without reliance on token emissions or inflationary incentives. As protocol TVL grows and the tokenized securities market expands, revenue scales organically through increased borrowing activity, higher flash loan volumes, and growing institutional participation. The fixed DUAL supply ensures that revenue per token increases as the protocol matures, creating a fundamentally deflationary value accrual mechanism for token holders.