Abstract

This PIP defines the Fee Routing Protocol for Pars Network. It establishes how protocol fees are collected, aggregated, and distributed across the ecosystem including the 10 Committees, gauge-directed emissions, and staker rewards.

Motivation

Pars Network generates revenue from multiple sources:

• Bond premiums
• Advance facility fees
• Protocol-owned liquidity trading fees
• Yield from treasury positions

This revenue must be distributed transparently and efficiently to:

1. Fund the 10 operational Committees
2. Reward veASHA stakers
3. Incentivize liquidity via gauge-directed emissions
4. Build treasury reserves

Without a standardized fee routing system:

• Distribution would require manual governance actions
• Committee funding would be inconsistent
• Staker rewards would be unpredictable
• Gauge incentives could not respond to market conditions

Specification

Fee Routing Architecture

┌─────────────────────────────────────────────────────────────────────────────────────┐
│                           FEE ROUTING PROTOCOL                                        │
├─────────────────────────────────────────────────────────────────────────────────────┤
│                                                                                      │
│  REVENUE SOURCES                                                                     │
│  ┌───────────────────────────────────────────────────────────────────────────────┐  │
│  │  Bond Premiums │ Advance Fees │ Trading Fees │ Yield │ Liquidations          │  │
│  └───────────────────────────────────────────────────────────────────────────────┘  │
│                                      │                                               │
│                                      ▼                                               │
│  FEE ROUTER                                                                          │
│  ┌───────────────────────────────────────────────────────────────────────────────┐  │
│  │                                                                               │  │
│  │  Revenue In ──► Aggregate ──► Distribute per epoch                            │  │
│  │                                                                               │  │
│  │  Distribution Split:                                                          │  │
│  │  ┌─────────────────────────────────────────────────────────────────────────┐  │  │
│  │  │  10% ──► Base Allocation (10 Committees)                                │  │  │
│  │  │  │       └──► KHAZ 25% │ AMN 10% │ SAL 10% │ FARH 10% │ DAN 10%        │  │  │
│  │  │  │           └──► SAZ 10% │ DAD 5% │ PAY 5% │ WAQF 10% │ MIZ 5%        │  │  │
│  │  │  │                                                                      │  │  │
│  │  │  90% ──► Gauge Controller                                               │  │  │
│  │  │         └──► veASHA-weighted gauge voting determines allocation         │  │  │
│  │  └─────────────────────────────────────────────────────────────────────────┘  │  │
│  │                                                                               │  │
│  └───────────────────────────────────────────────────────────────────────────────┘  │
│                                      │                                               │
│                                      ▼                                               │
│  DISTRIBUTION TARGETS                                                                │
│  ┌───────────┐ ┌───────────┐ ┌───────────┐ ┌───────────┐ ┌───────────┐            │
│  │ Committee │ │  xPARS    │ │ Liquidity │ │ Treasury  │ │  Bonds    │            │
│  │ Treasuries│ │  Stakers  │ │  Gauges   │ │ Reserves  │ │  Market   │            │
│  └───────────┘ └───────────┘ └───────────┘ └───────────┘ └───────────┘            │
│                                                                                      │
└─────────────────────────────────────────────────────────────────────────────────────┘

Fee Router Contract

The FeeRouter is the central hub for all protocol fee collection:

interface IFeeRouter {
    /// @notice Deposit fees into the router
    /// @param token The fee token (PARS, USDC, etc.)
    /// @param amount Amount of fees
    /// @param source Revenue source identifier
    function depositFees(
        address token,
        uint256 amount,
        bytes32 source
    ) external;

    /// @notice Trigger epoch distribution
    /// @dev Called by keeper or governance at epoch boundaries
    function distributeEpoch() external;

    /// @notice Get current epoch accumulated fees
    /// @return Total fees per token in current epoch
    function getEpochFees() external view returns (FeeAccumulator[] memory);

    /// @notice Get distribution split configuration
    /// @return baseAllocationPct Percentage to Committees (basis points)
    /// @return gaugeAllocationPct Percentage to GaugeController (basis points)
    function getDistributionSplit() external view returns (
        uint256 baseAllocationPct,
        uint256 gaugeAllocationPct
    );
}

Distribution Split

Allocation	Percentage	Recipient	Purpose
Base Allocation	10%	10 Committees	Guaranteed operational funding
Gauge-Directed	90%	GaugeController	veASHA-weighted distribution

The base allocation ensures Committees have predictable funding regardless of gauge voting outcomes.

Base Allocation Distribution

The 10% base allocation is split among Committees according to PIP-7002:

Committee	Symbol	Share of Base	Effective Total
Treasury	KHAZ	25%	2.5% of fees
Security	AMN	10%	1.0% of fees
Health	SAL	10%	1.0% of fees
Culture	FARH	10%	1.0% of fees
Research	DAN	10%	1.0% of fees
Infrastructure	SAZ	10%	1.0% of fees
Governance	DAD	5%	0.5% of fees
Consular	PAY	5%	0.5% of fees
Endowment	WAQF	10%	1.0% of fees
Integrity	MIZ	5%	0.5% of fees

Gauge Controller Integration

The remaining 90% flows to the GaugeController for veASHA-weighted distribution:

interface IGaugeController {
    /// @notice Get gauge weight for a recipient
    /// @param gauge The gauge address
    /// @return Weight in basis points
    function getGaugeWeight(address gauge) external view returns (uint256);

    /// @notice Vote for gauge weight allocation
    /// @param gauge The gauge to vote for
    /// @param weight Weight allocation (basis points of voter's veASHA)
    function vote(address gauge, uint256 weight) external;

    /// @notice Get total weight across all gauges
    /// @return Total weight sum
    function getTotalWeight() external view returns (uint256);

    /// @notice Distribute fees to gauges based on weights
    /// @param token Token to distribute
    /// @param amount Total amount to distribute
    function distribute(address token, uint256 amount) external;
}

Gauge Types

Gauge Type	Purpose	Example Recipients
Liquidity Gauges	Incentivize DEX liquidity	PARS/ETH, PARS/USDC pools
Staking Gauges	Reward xPARS stakers	xPARS vault
Committee Gauges	Additional Committee funding	Any of 10 Committees
Treasury Gauge	Build reserves	Main Treasury
Bond Gauge	Subsidize bond markets	Bond market contracts

Epoch Mechanics

Fees are distributed on a weekly epoch cycle:

Phase	Duration	Description
Accumulation	6 days	Fees accumulate in FeeRouter
Distribution	1 day	Keeper triggers distribution
Claim	Ongoing	Recipients claim their allocation

Receipt Registry

All fee distributions are recorded on-chain for transparency:

interface IReceiptRegistry {
    /// @notice Record a fee distribution
    /// @param epoch The epoch number
    /// @param recipient The receiving address
    /// @param token Token distributed
    /// @param amount Amount distributed
    /// @param source Distribution source (base/gauge)
    function recordDistribution(
        uint256 epoch,
        address recipient,
        address token,
        uint256 amount,
        bytes32 source
    ) external;

    /// @notice Get distribution history for a recipient
    /// @param recipient The address to query
    /// @param fromEpoch Starting epoch
    /// @param toEpoch Ending epoch
    /// @return Array of distribution records
    function getDistributions(
        address recipient,
        uint256 fromEpoch,
        uint256 toEpoch
    ) external view returns (DistributionRecord[] memory);
}

Governance Parameters

Parameter	Default Value	Governance Control
baseAllocationPct	1000 (10%)	Council resolution
epochDuration	7 days	Council resolution
minGaugeWeight	100 (1%)	Council resolution
maxGaugeWeight	5000 (50%)	Council resolution
voteDecayPeriod	30 days	Council resolution

Security Considerations

Fee Manipulation

• Revenue sources are whitelisted contracts only
• Fee deposits require valid source identifier
• Epoch timing prevents flash loan attacks on distribution

Gauge Voting

• veASHA-weighted voting prevents Sybil attacks
• Vote decay requires ongoing engagement
• Maximum weight cap prevents single gauge domination

Distribution Safety

• Multi-sig approval for parameter changes
• Timelock on distribution split modifications
• Emergency pause via 2-of-5 Guardian signers

References

• PIP-7000: DAO Governance Framework
• PIP-7002: Treasury Management Standard
• Curve Gauge Controller

Copyright

Copyright and related rights waived via CC0.