How Does a Protocol's Governance Token Reward Impact the Fee Calculation? ⎊ Path

How Does a Protocol’s Governance Token Reward Impact the Fee Calculation?

Governance token rewards are a separate stream of income from the trading fees. They are typically distributed to LPs as an incentive, increasing the total APY.

While they are a direct benefit, they are often subject to vesting or inflation, which can dilute their value. They are calculated based on a fixed emission schedule and added to the fee revenue for the total LP return.

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