Revenue Distribution

Neverland distributes 100% of protocol-generated revenue back into the ecosystem through a transparent, governance-directed system. veDUST holders control where every portion of revenue is allocated, ensuring protocol growth and community incentives remain fully 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 that allows them to vote on how the protocol’s revenue is allocated each epoch.

veDUST holders decide how revenue is divided among three primary categories:

veDUST Participation Incentives — rewards for veDUST lockers who participate in governance. DUST Buybacks & Burns — using revenue to reinforcing deflationary tokenomics. LP Staking Incentives — rewards distributed to liquidity providers that support DUST markets.

Revenue Flow

The diagram illustrates how supply-side activity, borrowing interest, and strategy yield feed into protocol revenue, which is then governed entirely by veDUST holders. Each epoch, the community votes on how this revenue is split across the three incentive categories, creating a continuous feedback loop between protocol activity and user rewards.

Revenue Model

Neverland’s revenue originates from the following sources:

Borrowing Interest — interest paid by borrowers in Neverland’s lending markets. Liquidation Fees — revenue collected from liquidations. Protocol-Owned Liquidity — DUST liquidity held by the protocol to stabilize markets and earn yield.

After collection, total revenue is allocated according to governance decisions as follows:

The portion assigned to veDUST Rewards is sent to the RevenueReward contract, which distributes rewards to veDUST holders. The portion assigned to LP Staking Incentives is routed to the LPStaking contract, which handles emissions to active liquidity providers. 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.

Governance Cycle

Revenue distribution follows a recurring, governance-directed cycle:

1. Collection: Protocol-generated revenue accumulates in the Treasury.

2. Vote: veDUST holders vote on allocation weights for each category.

3. Execution: The Treasury routes funds to RevenueReward, LPStaking, and the Buyback Safe according to the voted percentages.

4. Ongoing Epochs: These allocations remain active until the next governance epoch, when veDUST holders can vote to adjust distribution weights. Typically a governance epoch duration is one month.

This structure ensures that all protocol earnings are handled transparently, governed by veDUST, and distributed according to community priorities.

Key Principles

Full redistribution: 100% of protocol revenue is directed by veDUST governance. Transparent accounting: all allocations and burns are verifiable on-chain. Dynamic weighting: governance can rebalance incentives each governance epoch. Deflationary mechanism: buybacks and burns reduce circulating supply over time. Aligned incentives: active governance participation directly increases user rewards.

Governance Epoch Example

Each governance epoch concludes with a vote from veDUST holders to determine how protocol revenue will be distributed in the following cycle. The resulting weights define the share of total revenue allocated to each incentive category.

Example Allocation:

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 next governance epoch, when veDUST holders can vote again to update the weighting.

Why It Matters

Revenue distribution is one of Neverland’s defining mechanisms. It transforms governance decisions 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 fully community-driven, self-reinforcing ecosystem.