Business Model

How Horizon Protocol generates fees

For any project to achieve long-term sustainability, it must establish a viable business model that generates fees, often referred to as "Real Yields." This means that the project's fee generation comes from sources other than inflation.

Horizon Protocol has been designed to ensure its sustainability. The initial inflation via tokenomics will provide the necessary resources for the project to grow. As it matures, Horizon Protocol shifts its focus towards generating fees through protocol usage, reducing its dependence on token inflation.

All fees collected by Horizon Protocol are distributed among HZN token holders who actively participate in staking. These fees encompass various sources:

  • Spot Exchange Fees

  • Futures Exchange Fees

  • Interests via zAsset Loans

  • Wrap/Unwrap Fees for Token Wrappers

Spot Exchange Fees

A percentage of each trade on Horizon Protocol’s Spot market generates fees that go to the project's stakers.

Trading fees vary based on the price variance threshold of each zAsset and the market's volatility.

Futures Exchange Fees

A percentage of each trade on the Horizon Futures Exchange generates fees that go to the project's stakers.

Interests via zAsset Loans

In the future, Horizon Protocol will introduce zAsset loans, generating additional revenue through interest. All zAsset loans, including collateralized shorts, will incur interest payments to Horizon Protocol, operating similarly to traditional loans.

Wrap/Unwrap Fees for Token Wrappers

Horizon Protocol is expanding collateral options within the protocol. Currently, the primary collateral is zUSD, minted through HZN staking. In the future, users will be able to wrap other tokens into zAssets. Wrapping and unwrapping token wrappers will incur a small fee, generating revenue for protocol stakers.

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