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Governance-Driven Treasury & Rewards

STBL ensures sustainable treasury management through a governance-controlled allocation model, where a portion of the protocol's revenue is directed towards a community-managed treasury. This treasury supports ecosystem growth, liquidity incentives, and risk mitigation strategies, reinforcing the protocol's long-term stability.

1. Treasury Allocation & Governance Oversight​

STBL incorporates a fee extraction mechanism within its Yield Pool, ensuring that fees are systematically allocated across critical protocol functions. These fees originate from coupon payments on collateralized assets, contributing to a structured treasury distribution model:

  • Treasury Reserve: Funds are allocated through community governance votes to support new asset vaults, protocol upgrades, and infrastructure expansion.
  • Loss Reserve Pool: A risk mitigation buffer that covers default risks (0.20%–0.33%) associated with tokenized RWAs, ensuring protocol resilience.
  • Protocol Rewards: A portion of fees is directed toward governance incentives, rewarding users who stake USST tokens to participate in decision-making. By maintaining a transparent governance framework, the treasury remains community-controlled, with USST holders voting on key allocation strategies.

2. Treasury-Governed Yield & Liquidity Mechanisms​

STBL's treasury plays a central role in optimizing yield strategies, ensuring that generated returns benefit the entire ecosystem. This is achieved through:

  • Yield Optimization: Revenue generated from protocol fees and treasury-backed RWAs is reinvested into yield-generating strategies, increasing long-term rewards for USST stakers.
  • Liquidity Support: A portion of the treasury is used to enhance USST's liquidity across DeFi platforms, ensuring stable on-chain transactions and exchange integrations.
  • Incentives for Early Adopters: Governance decisions may include rewarding long-term stakers and liquidity providers, fostering sustainable protocol growth.

3. USST Staking & Reward Mechanisms​

The governance treasury further distributes rewards to USST token stakers, aligning incentives between protocol contributors, liquidity providers, and governance participants.

  • USST holders stake tokens to earn a share of protocol fees, reinforcing long-term participation and decentralization.
  • Time-locked staking derivatives (sUSST) grant amplified governance influence, ensuring that higher voting power is given to long-term stakers.
  • Staked USST tokens provide access to treasury rewards, distributed based on participation in governance proposals and community-driven initiatives