Revenue Distribution
Neverland distributes 100% of protocol-generated revenue back into the ecosystem through a transparent system. Revenue is shared between veDUST holders, DUST buybacks and burns, and liquidity incentives, keeping protocol growth and community incentives aligned.
Overview
Neverland’s governance uses a vote-escrow model inspired by veCRV but optimized for flexibility and sustainability. By locking DUST to mint veDUST, users gain governance power and a share of the protocol’s revenue.
Revenue is divided among three primary categories:
veDUST Participation Incentives: rewards for every veDUST holder, paid weekly in USDC in proportion to voting power. Voting is not required to earn them.
DUST Buybacks & Burns: using revenue to reinforce deflationary tokenomics.
LP Staking Incentives: rewards distributed to liquidity providers that support DUST markets.
Revenue Flow
The diagram illustrates how supply-side activity and borrowing interest feed into protocol revenue, and how that revenue is split across the three incentive categories, creating a continuous feedback loop between protocol activity and user rewards. It shows the end-state model, in which veDUST holders govern the split; until community voting on the weights is enabled, the team sets them.
Revenue Model
Neverland’s revenue originates from the following sources:
Borrowing Interest: the reserve-factor share of the interest paid by borrowers in Neverland’s lending markets.
Liquidation Fees: the protocol’s share of each liquidation bonus.
Flash-Loan Premiums: the 0.50% premium on flash loans, paid entirely to the protocol.
Lending revenue accrues to the protocol’s Revenue Safe. After collection, total revenue is allocated as follows:
The portion assigned to veDUST Rewards is sent to the RevenueReward contract, which distributes it to veDUST holders weekly, in USDC.
The portion assigned to LP Staking Incentives is paid to liquidity providers through Merkl incentive campaigns, currently on the USDC/DUST Uniswap V2 pool, and can be claimed from the app’s LP Rewards page.
The portion assigned to DUST Buybacks & Burns is transferred to a protocol-owned safe wallet, which executes open-market buybacks and performs token burns transparently on-chain.
This structure ensures clear separation of revenue streams and full traceability of every allocation.
Liquidity & Incentives
LP Staking – ensures consistent and deep liquidity for DUST pairs, rewarding engaged liquidity providers.
Protocol-Owned Liquidity – creates a stable, self-sustaining liquidity base that reduces reliance on short-term yield farmers.
These mechanisms provide long-term liquidity stability and align incentives between the protocol and its users.
Distribution Cycle
Revenue distribution follows a recurring cycle:
Collection: Protocol-generated revenue accumulates in the Revenue Safe.
Allocation: The Neverland team sets the allocation weights for each category. Community voting on the weights is not enabled yet.
Execution: The Revenue Safe routes funds to RevenueReward, the LP incentive campaigns, and buybacks according to the current weights. RevenueReward pays veDUST holders every week.
Ongoing Epochs: These allocations remain active until the weights are updated.
This structure ensures that all protocol earnings are handled transparently and distributed across the three categories.
Key Principles
Full redistribution: 100% of protocol revenue flows back to veDUST rewards, buybacks and burns, and liquidity incentives.
Transparent accounting: all allocations and burns are verifiable on-chain.
Dynamic weighting: the allocation weights can be rebalanced as the protocol grows.
Deflationary mechanism: buybacks and burns reduce circulating supply over time.
Aligned incentives: veDUST holders earn a direct share of protocol revenue.
Allocation Example
The allocation weights define the share of total revenue allocated to each incentive category.
Example Allocation:
veDUST Participation Incentives
50%
Distributed to every veDUST holder in proportion to voting power.
DUST Buybacks & Burns
30%
Used to buy DUST from the open market and permanently burn it, reducing the circulating supply.
LP Staking Incentives
20%
Provided to liquidity providers that support DUST liquidity, ensuring stability and depth.
If the protocol generated $100,000 in revenue during the epoch, the distribution would be:
$50,000 → veDUST participation rewards
$30,000 → DUST buybacks and burns
$20,000 → LP staking incentives
These allocations remain in effect until the weights are next updated.
Why It Matters
Revenue distribution is one of Neverland’s defining mechanisms. It transforms protocol activity into real, measurable outcomes: rewarding commitment, maintaining liquidity, and supporting deflationary tokenomics.
Every DUST lock and every governance vote contributes directly to the protocol’s long-term sustainability, ensuring that Neverland remains a community-driven, self-reinforcing ecosystem.
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