Revenue Model

The Checks Platform's business model is embedded in its smart contracts, ensuring that as usage grows, the platform accrues value which can sustain development and reward CHECK token stakers. This page outlines the primary revenue streams and fee structures.

Primary Revenue Streams

Protocol Fees on NFT Check Creation

Whenever a new NFT Check is minted, a small fee is charged based on the value or type of the contract. For example, the platform might charge 0.05% of the asset value as a one-time issuance fee (with an additional small fee to cover gas costs).

If paid in the native blockchain or collateral currency, the protocol may periodically convert those to CHECK (to distribute or burn). Issuance fees capture immediate value from usage – essentially users pay for the convenience and security of using the protocol instead of a lawyer or custom contract.

The fee levels will be governed by CHECK holders and can be adjusted to remain competitive (e.g., if a rival protocol charges less).

Yield Performance Fee

The Checks Platform may charge a performance fee on the yield earned from locked collateral—similar to how Yearn Vaults take a percentage of the profits generated for users.

For example, if an Escrow Check backed by 1,000 USDC earns $100 in interest, the Checks Platform could take a 10% fee ($10), leaving $90 in net profit for the owner. These earnings would then be split evenly between the Checks Platform and users holding Yield Checks.

This model ensures that protocol incentives are aligned with effective yield strategies, rewarding both platform growth and CHECK token stakers.

Performance Fee Structure

Alternatively, or in addition, a small Assets Under Management (AUM) fee—such as 0.5% annually—may be applied to yield-bearing balances. However, the initial fee structure prioritizes a performance-based model, likely ranging from 10% to 20% of yield earned.

This ensures users are only charged when they benefit directly, reinforcing a user-aligned structure.

Distribution of Fees

All performance fees collected—regardless of the asset type—are directed to a protocol treasury or distributed via the rewards pool. In the base case, the platform utilizes Aave for yield generation. Since Aave does not charge lenders, the full interest can be split between users and the protocol.

Should the platform adopt more aggressive strategies, such as yield farming, higher performance fees may apply to account for increased risk and active management.

Marketplace Fees

With Paymart fully integrated, the Checks Platform offers a more streamlined and specialized trading experience. Trades of NFT Checks conducted through Paymart will incur small fees, typically ranging from 1% to 2%, aligning with common marketplace standards.

These fees are automatically distributed by smart contracts to Yield Check holders, the protocol treasury, and other designated channels—ensuring transparent, on-chain revenue flows that directly support platform sustainability.

Paymart Advantages

Paymart delivers a specialized marketplace experience that goes beyond general-purpose platforms like OpenSea or Rarible. Purpose-built to handle the unique structure of NFT Checks, it accurately represents complex financial agreements—such as escrows, vesting schedules, and future payouts—while also supporting other emerging financial NFT formats and traditional assets.

Features include:

• Advanced filters for financial traits (maturity period, collateral type, yield rate)

• Integrated valuation tools for real-time insights into locked assets

• Bulk listing and asset grouping tools

• Built-in dispute resolution, yield tracking, and payout systems

External Marketplace Royalties

For external marketplaces, NFT Checks will implement EIP-2981 to suggest a royalty—typically 0.5%—on each secondary sale. While enforcement is subject to marketplace compliance, many platforms honor this standard, allowing the protocol to retain some revenue flow even outside its native environment.

Interest Rate Spread (for P2P Lending)

In the peer-to-peer lending scenarios facilitated by NFT Checks, the platform could take a small cut of the interest payments. For instance, if Bob is paying 5% interest to Alice on a loan formalized by an NFT Check, the smart contract could route 0.2% of that to the protocol (effectively Bob pays 5.2%, Alice receives 5%, 0.2% goes to a treasury).

This is analogous to how some lending platforms take a protocol fee on interest (Compound, for example, has a reserve factor). The contracts can accrue these interest fees over time as loan payments are made, and periodically transfer them to a treasury. This revenue stream would grow as P2P loans on the platform increase.

Premium Services

In the future, the platform might offer value-added services for a fee. For example:

• Optional KYC/Compliance verification through a third-party

• White-label or enterprise versions of NFT Checks for businesses

• Custom integrations for specific business workflows

These represent potential revenue streams outside the core on-chain fee model.

Fee Allocation and Distribution

All fees collected by the protocol are typically funneled into a platform treasury. From there, the fees serve multiple purposes:

• Funding ongoing development

• Rewarding stakers (through a distribution or buyback mechanism)

• Supporting CHECK token burns to support the token value

• Building a Reserves fund that could compensate users in case of a bug or hack

Initially, the revenue model will be simple (small minting fees + yield fees) to encourage adoption, and as usage ramps up, the DAO can vote to introduce or adjust fees to ensure long-term sustainability.

Advantages of Polygon Deployment

The Polygon deployment aids the revenue model through low gas costs, meaning the platform can charge low percentage fees and still be viable. Users would not be deterred by high gas when creating many small checks (e.g., payroll streaming to many employees), so the platform can capture a large volume of micro-transactions.

These small fees aggregate into meaningful revenue. Over many transactions, the value of CHECK is tied to these revenue streams, creating a flywheel effect: more usage → more fees → more rewards to Yield Check holders (or tokens burned) → token value increase → more incentive to use and hold, and so on.

Revenue Projection Example

Imagine $10M is locked in various NFT Checks, primarily in stablecoins, earning an average annual yield of 5% through Aave. This generates $500k in interest over the year. With a 10% performance fee applied, the protocol would collect $50k from this yield.

Additionally, if $50M worth of token vestings are distributed via NFT Checks with a 0.05% creation fee, this results in $25k earned upfront. Furthermore, if $5M worth of NFT Checks are traded on a marketplace with a 1% royalty fee, it would generate another $50k.

These estimates illustrate how moderate usage could produce annual revenues in the hundreds of thousands of dollars—sufficient to fund operations and provide staking rewards—while paving the way for sustainable growth as adoption expands.