Zunami Revenue Distribution

Following the introduction of the Revenue Switch (twitter link), $ZUN stakers now receive 100% of the protocol’s revenue. This shift marked a significant step for Zunami in aligning its tokenomics with the interests of its community and the broader #DeFi industry. In this article, we’ll explore the sources of Zunami’s revenue, how it’s distributed, and the outcomes of the first 3 distributions.

The Role of Tokenomics — The Cash Flow PowerHouse

Zunami’s tokenomics are built to create value for its token holders. The 100% revenue-sharing model ensures that all protocol income flows directly to $ZUN stakers. This utility acts as a powerful amplifier, leveraging the protocol’s architecture and its use of omnipools.

Together with this, Zunami leverages its weekly emissions voting mechanism for allocating bribes, achieving an average bribe efficiency of 1.6x to 4x. This approach not only amplifies yields for Zunami’s stablecoins (zunUSD, zunETH, zunBTC) but also makes the protocol more attractive to liquidity providers and stakers alike.

Revenue-to-TVL: A Critical Metric

One of the most reliable ways to evaluate a DeFi protocol’s performance is by examining its Revenue-to-TVL ratio, which measures how efficiently a protocol generates income relative to its total value locked (TVL).

Zunami’s current ratio stands at 0.25, reflecting its capacity to generate $0.25 of annual revenue for every $1 locked in the protocol. Over the first 3 distributions, Zunami shared $48,400 in rewards with stakers, which, annualized, amounts to $768,000. This figure is particularly notable given the protocol’s TVL of $3,030,000, demonstrating the strength of Zunami’s model in generating consistent returns.

Sources of Revenue

Zunami generates income through several streams, each contributing to the rewards distributed to $ZUN stakers:

• Yield on Collateral

Each stablecoin issued by Zunami is backed by its own omnipool, which deploys liquidity into low-risk, on-chain strategies to generate yield. Users can access detailed analytics for these pools here — https://app.zunami.io/zun-stables.

• Performance Fees

Zunami’s APS Vaults collect a 15% performance fee on rewards earned during auto-compounding, with all fees going to $ZUN stakers.

• Redemption Fees

A 0.75% swap fee is applied when users redeem zunUSD, zunETH, or zunBTC. This fee is fully distributed to $ZUN stakers.

• Early Unlock Fees

$ZUN staking is designed for long-term commitment, but early unlocks incur a 15% penalty, which is also redistributed to $ZUN stakers.

Revenue Distribution Process

All rewards initially flow into the Recapitalizer Contract (0xd5D1ACC9c7EbAf8bBF85C45AEe2b8b3f3b1bd062), where they are held for at least a week before being transferred to the $ZUN Staking Contract.

Once a distribution begins, rewards are streamed to all stakers over a seven-day period. These rewards accumulate with each block and are available for claim at any point during or after the distribution.

Current Rewards

The diverse mix of tokens currently distributed to $ZUN stakers includes:

• CRV
• USDT
• zunUSD
• zunETH
• CVX

Final Thoughts

Zunami demonstrates the importance of well-structured tokenomics and revenue-sharing models in creating sustainable value for both the protocol and its users. The Revenue-to-TVL ratio of 0.25 sets a strong benchmark, highlighting Zunami’s efficiency and scalability.

Through 100% revenue-sharing from omnipool strategies and protocol fees, combined with leveraging stablecoin yields via Vote Markets, Zunami continues to attract attention as an innovative and promising DeFi project.

If you haven’t yet explored staking $ZUN or using Zunami’s stablecoins, now might be the perfect time to see how it can fit into your strategy.

Authored by Phil Eryushev.