How Do Protocol Fees Contribute to the Long-Term Value of a DAO’s Native Token?

Protocol fees, generated from the use of the DAO's platform (e.g. trading fees, lending interest), create a continuous revenue stream for the treasury. This revenue can be used for token buybacks, which reduces the circulating supply, or distributed as yield to token stakers.

Both mechanisms create demand and scarcity for the native token, supporting its price and thus increasing its long-term value. This sustainable revenue model is essential for the DAO's financial health.