# Tokenomics

### <mark style="color:blue;">Token Flow</mark>

<figure><img src="/files/bK9c9AExA4acKnuVIR36" alt=""><figcaption></figcaption></figure>

### <mark style="color:blue;">Distribution</mark>

<table><thead><tr><th width="197">Category</th><th width="79">%</th><th width="172">To</th><th width="353">Details</th></tr></thead><tbody><tr><td>KLEVA Mint</td><td>75%</td><td>Users</td><td>Depositor(Staker) Profit, Lender Reward</td></tr><tr><td></td><td>15%</td><td>Dev Fund</td><td>Protocol Operation</td></tr><tr><td></td><td>10%</td><td>Eco Fund</td><td>KLEVA Ecosystem Expansion</td></tr><tr><td>Lending Fee</td><td>81%</td><td>Users</td><td>Depositor Profit</td></tr><tr><td></td><td>9%</td><td>Dev Fund</td><td>Protocol Operation</td></tr><tr><td></td><td>10%</td><td>Buyback &#x26; Burn</td><td>Usage for Buyback &#x26; Burn</td></tr><tr><td>Performance Fee</td><td>70%</td><td>Users</td><td>Leverage Investor Profit</td></tr><tr><td></td><td>10%</td><td>Users</td><td>KLEVA Staking Reward</td></tr><tr><td></td><td>10%</td><td>Dev Fund</td><td>Protocol Operation</td></tr><tr><td></td><td>10%</td><td>Buyback &#x26; Burn</td><td>Usage for Buyback &#x26; Burn</td></tr><tr><td>Liquidation Fee</td><td>100%</td><td>Buyback &#x26; Burn</td><td>Usage for Buyback &#x26; Burn(5% of Liquidation)</td></tr><tr><td>Liquidator Reward</td><td>100%</td><td>Dev Fund</td><td>Protocol Operation(2% of Liquidation)</td></tr></tbody></table>

<mark style="color:blue;">Protocol Fee and Distribution</mark>

KLEVA's fee revenue is all related to leverage investments as followed:

* Interest fees on borrowing: 19% of the total interest.
* Auto-compound performance fees: 30% of the profits from leverage investment

Fee revenue is not fixed and it depends on the size of leverage investments, however, minimum 50% of total protocol fee is allocated as follows:

* 52.6% of the fee revenue from interest earned by borrowers: KLEVA token Buyback & Burn.
* 33.3% of the fee revenue from leverage investment DEX rewards auto-compound: KLEVA token Buyback & Burn.
* 33.3% of the fee revenue from leverage investment DEX rewards auto-compound: Additional rewards for KLEVA token staking

The remaining 47.4% of the fee revenue from interest earned by borrowers and 33.3% of the fee revenue from leverage investment DEX rewards auto-compound are utilized for protocol maintenance costs.

### <mark style="color:blue;">Interest Income (Depositor's Earnings)</mark>

* Leverage investors borrow assets from KLEVA, and pay interest costs.
* The interest costs paid by the borrowing user are accrued at position closure.
* 81% of the interest costs paid by the borrowing user, excluding a 19% fee, are distributed to depositors as interest income. This means that the interest costs paid by the investor borrowing KLAY become earnings for KLAY depositors.

### <mark style="color:blue;">Investment Profits (Leverage investors's Earning)</mark>

* Profits for leverage investors include distribution earnings from governance tokens provided by the target DEX and trading fee earnings (DEX's profit depends on the policies of the specific DEX).
* 70% of profit from governance tokens, excluding 30% as a fee, is automatically reinvested through the Auto-Compounding system.
* KLEVA token rewards are provided as compensation for lending assets. Since the KLEVA token is a reward for lending assets, it will not be provided without lending, meaning at a leverage ratio of 1.0
* The interest rate for borrowing varies based on the utilization rate of the respective pool. (Check the interest rate variation model.)
* The total earnings for leverage investments are calculated, including KLEVA token rewards.


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