> For the complete documentation index, see [llms.txt](https://usdu.gitbook.io/docs/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://usdu.gitbook.io/docs/economics-and-incentives/protocol-revenue-model.md).

# Protocol Revenue Model

The **USDU Finance** protocol is designed to generate sustainable on-chain revenue through its active role in lending markets and liquidity provision, rather than by charging users direct fees.

**How USDU Finance earns revenue:**

* The protocol governance can propose minting modules that mint $USDu into strategic markets (such as Curve pools or lending protocols).
* When $USDu is provided as lending liquidity, the protocol receives yield-bearing positions (for example, LP tokens or lending vault tokens).
* Interest paid by borrowers on this liquidity results in a steady revenue stream to the protocol.

**Revenue Uses:**

* A portion of protocol income is used to:
  * Support **liquidity incentives** in key markets (for example, bribes on Curve or Morpho)
  * Subsidize borrowing rates when needed to attract demand
  * Expand adoption and integrations of $USDu in DeFi
  * Strengthen the protocol treasury for long-term resilience

**Key Design Principles:**

* The protocol itself earns revenue **without charging users deposit fees or performance fees** in the $USDu Lending Vault.
* Revenue scales with **overall lending activity** and demand for $USDu liquidity.
* All protocol minting and liquidity provision actions require governance approval through formal modules.

**Summary:**

The USDU Finance protocol monetizes by actively participating in DeFi lending and liquidity markets and using that income to fuel ecosystem growth, drive adoption, and create a positive flywheel effect for $USDu.