Economic and Governance Model
Axion Vault is designed to balance three competing priorities:
attractive investor returns,
affordable issuer participation, and
long-term protocol sustainability.
The economic model organizes all system fees, yield flows, and reserves into a transparent structure governed by the Axion Vault DAO, powered by the AVTG Governance Token. This ensures that incentives remain aligned across investors, issuers, data providers, and the protocol itself.
Yield Distribution Model
Axion Vault converts off-chain income from real-world assets into on-chain, programmable yield. When a vault distributes yield, proceeds are routed using the following standardized allocation:
Yield Allocation
Investor Yield
92%
ABT holders
Main return to investors, directly reflecting RWA performance
DAO Yield Commission
7%
DAO Treasury
Funds audits, compliance, oracle incentives, governance operations
Contingency Reserve
1%
Vault Reserve or DAO Emergency Fund
Liquidity buffer, operational protection, technical recovery
This structure ensures that investors receive the majority of yield, while the DAO maintains sustainable funding for protocol management and safety.
Protocol Fees
Axion Vault applies a minimal and predictable fee framework designed to support infrastructure, ensure operational continuity, and incentivize accurate data reporting.
Fee Overview
Minting Fee
0.5%
Issuer
DAO Treasury
Infrastructure access, onboarding, protocol maintenance
Redemption Fee
0.5%
Investor
Split: Issuer (50%) / DAO (50%)
Settlement costs (issuer) + treasury sustainability (DAO)
Oracle Update Fee
Variable
Issuer
Oracle Providers (DAO-approved)
NAV updates, valuations, attestations
Backstop Premium
0.10–0.25% annually
Issuer
Backstop Fund (DAO-controlled)
Insurance against issuer failure or redemption delays
These fees support system reliability without eroding investor returns.
Stability and Risk Management
Axion Vault maintains multiple layers of risk protection, ensuring that tokenized assets remain liquid and secure across market cycles.
Key Components
Contingency Reserve (1%) Supports short-term liquidity, emergency operations, NAV irregularities, or technical fixes.
Backstop Fund Capitalized by issuer premiums, providing system-wide safety against redemption delays or issuer defaults.
Vault-Level Isolation Each vault is legally and technically segregated to prevent cross-issuer contagion.
This multi-layer structure brings traditional financial discipline into an on-chain environment.
Governance Model
Axion Vault is governed by the Axion Vault DAO, ensuring decentralized oversight of protocol parameters, risk settings, integrations, and treasury management.
Central to governance is the Axion Vault Governance Token (AVTG), which grants voting rights and proposal authority to participants committed to the long-term success of the ecosystem.
Axion Vault Governance Token (AVTG)
AVT aligns incentives across all ecosystem participants through transparent, on-chain governance.
AVT Utility
Voting on protocol upgrades and parameter changes
Electing or removing oracle and attestor providers
Managing treasury allocations
Setting fee bands and commission rates
Deploying backstop resources during stress events
Authorizing cross-chain expansions and integrations
AVT governs the protocol, not the collateral inside vaults. This distinction ensures regulatory clarity and investor protection.
Governance Responsibilities
The DAO collectively manages the economic and risk parameters of the system.
The DAO controls:
Treasury management and spending
Commission rates and yield allocation rules
Collateral haircuts and valuation requirements
Attestor and oracle whitelisting
Minting and redemption fee parameters
Backstop Fund deployment and emergency procedures
Protocol upgrades and cross-chain deployment strategy
All governance actions occur through on-chain proposals.
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