Protocol Fees

Protocol Revenue and Fees

To maintain and develop the platform, Subunit charges certain protocol fees on its services. These fees are modest and are used to support the Subunit treasury (which in turn might fund development, legal compliance, maintenance of the platform, and rewards/incentives). The fee structure covers the key stages of the real estate investment cycle on Subunit.

Admin Fee

When a new property is listed on the Subunit, the protocol takes a one-time fee from the property acquisition. For example, if a property costs $500,000 and is funded through Subunit, the protocol will charge a percentage of that as a fee. The fee will be split: part of it will go to cover legal and administrative costs of setting up the property entity, and part would remain in the Subunit treasury as revenue. Because Subunit uses an investment club model, these fees are disclosed to the club members and agreed upon when voting to proceed with a deal. By keeping them low, Subunit ensures most of the contributed capital goes into the actual investment, while still funding the platform’s needs. The initial listing fee will be 5%, but this is subject to change via DAO governance.

Rental Management Fee

Subunit will levy a fee on rental income processed through the platform. Essentially, when rental income is collected and about to be distributed to token holders, a small slice is taken and sent to the Subunit protocol treasury. This fee is akin to a property management fee or servicing fee, except it’s automated via smart contract. For example, if a property generates $10,000 in net rent for distribution, a 5% fee ($500) would go to the protocol, and $9,500 would go to the investors. In Subunit’s case, some of that real-world property management might be done by an off-chain company, possibly paid from the maintenance reserve or directly – the 5% protocol fee would be for the platform’s maintaining the smart contracts and tools that allow the DAO to function. If Subunit does not need a rental fee (for instance, if other revenue sources suffice), it might reduce or zero this out. The initial rental management fee will be 5%, but this is subject to change via DAO governance.

Trading Fee

When UNIT property tokens are traded on the Subunit DEX or marketplace, each trade will incur a transaction fee. The DEX uses an AMM model. The liquidity providers in the pool earn a portion of that fee, and a portion might also be routed to the protocol treasury. These trading fees not only compensate those providing liquidity (ensuring there’s incentive for people to stake USDC and property tokens in pools) but is also be a revenue stream for the protocol. The initial trading fee will be 0.3%, but this is subject to change via DAO governance.

Liquidity Reserve

The liquidity reserve is an amount of USDC set aside for each property to be used for the creation of a liquidity pool on the DEX. It ensures the treasury has enough capital to start liquidity pools and facilitate trading on Subunit. Liquidity rewards from this USDC amount will go towards the treasury and count as revenue for the protocol. The initial liquidity reserve will be 5%, but this is subject to change via DAO governance.