Protocol Revenue and Sustainability

How GigaETH converts productive ETH, borrowing flow, and payments into durable cash flow.

GigaETH’s revenue model is intentionally multi-source and flow-based. It does not depend on mercenary liquidity, one-off fees, or liquidation events. Revenue accrues as a function of continuous utilization across borrowing and payments.

There are three primary revenue streams.

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1) Net Interest Spread

Borrowers access liquidity against risk-weighted LST collateral. Bidders supply ETH or USD stablecoins at a clearing rate determined by auction. GigaETH captures a bounded spread between borrower rates and bidder compensation.

BorrowRate(t)  = r_b(t)
BidderRate(t)  = r_l(t)
ProtocolSpread = r_b(t) - r_l(t)

Total interest revenue over a period T is:

InterestRevenue = ∫_{0..T} ProtocolSpread * B_giga(t) dt

Because B_giga(t) is driven by payments (Section 12), utilization is smoother and more predictable than speculative borrowing. This allows tighter spreads without sacrificing bidder participation.

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2) Payments Interchange

When borrowed balances are spent via cards or merchant rails, each transaction generates interchange. GigaETH participates in interchange at the protocol layer without custody.

InterchangeRevenue = Σ tx_i.amount * interchange_rate

Where:

• interchange_rate is set by the payment rail

• tx_i.amount is the settled spend per transaction

Payments introduce high velocity. Even modest balances can generate substantial volume over time, compounding interchange revenue without increasing risk.

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3) Infrastructure Fees (Sessioned Spend)

Session-based authorization (Section 11) enables optional infrastructure fees for advanced controls: higher limits, longer sessions, or enterprise policies.

SessionFee = base_fee + k * (limit * duration)

These fees are opt-in and priced to avoid rent extraction. They scale with usage sophistication, not leverage.

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Cash Flow Properties

GigaETH’s revenue is:

• Utilization-linked, not TVL-linked

• Counter-cyclical to speculation

• Non-extractive to users avoiding liquidation

This creates a system where protocol income grows with real economic activity, not volatility.

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Capital Sustainability Check

A simple sustainability condition:

TotalRevenue >=
  (BidderCompensation + RiskReserves + InfraCosts)

Risk reserves are funded continuously from spreads and interchange, reducing tail risk without sudden parameter changes.

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Minimal On-Chain Accounting

struct Revenue {
    uint256 interest;
    uint256 interchange;
    uint256 sessions;
}

function accrueInterest(uint256 amount) {
    revenue.interest += amount;
}

function accrueInterchange(uint256 amount) {
    revenue.interchange += amount;
}

function accrueSession(uint256 amount) {
    revenue.sessions += amount;
}