Fee Routing

Fee routing is the policy that decides what share of the fees a protocol collects goes where: into token buybacks, to stakers, to a burn address, into a treasury or trust, or back to the operating company.

TradFi parallel: Like a company's capital allocation policy. The same earnings can be paid out as a dividend, spent on a share repurchase, or retained for hiring and acquisitions, and the payout ratio is a board decision rather than an accounting result.

Key Takeaways

01
Start with the definition: Fee routing is the policy that decides what share of the fees a protocol collects goes where: into token buybacks, to stakers, to a burn address, into a treasury or trust, or back to the operating company.
02
Read the governing documentation before treating a label as a supply conclusion
03
Separate scheduled entitlement, contractual transferability, and actual circulating supply
04
Use dated on-chain or canonical data for any amount, percentage, or event date
05
A buyback, unlock, burn, or reward label does not by itself establish the net supply effect
06
Remove or qualify any project-specific conclusion that cannot be reproduced from a primary source

How It Works

The label alone does not establish a token's current supply impact. To evaluate fee routing, read the governing token documentation and contract rules, distinguish scheduled entitlement from tokens that are actually transferable or circulating, and use dated on-chain data for any quantity. Do not infer a burn, price effect, holder behavior, or release amount from the label alone.

When a claim depends on a figure, date, allocation, fee route, or prior market event, retain it only when the underlying primary document, governance record, contract state, or reproducible data snapshot is available. Otherwise state the mechanism generally and leave the project-specific conclusion out.