💰Protocol Revenue

The protocol currently generates revenue from two primary sources:

1. 10% Performance Fee Torch Finance charges a 10% performance fee on rewards earned from deploying capital into various external strategies. These earnings are allocated to the protocol’s reserve fund to enhance stability and support long-term sustainability.

2. Liquidity Premium During Redemption Cooldown When users redeem their tgUSD, they must wait through a cooldown period (currently set at 14 days). This delay allows the protocol sufficient time to withdraw funds from external protocols (see Purpose of the Cooldown Period section). If there is no liquidity crunch and the withdrawal is successful, the interest accrued during the remaining cooldown period is retained by the protocol as additional income.