> For the complete documentation index, see [llms.txt](https://docs.lotrio.app/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.lotrio.app/the-lottery/tokenomics.md).

# Fees, prize pool & burn

The 2% trading fee, the treasury wallet, the 80% lottery share, pot distribution and buyback & burn.

There are two separate splits to understand:

1. how trading fees are divided when `$LOTRIO` is bought or sold on Pons;
2. how a completed lottery pot is divided.

## 1. Trading fee

| Action                                                                           | Production fee |
| -------------------------------------------------------------------------------- | -------------: |
| Buy on the Pons bonding curve or, after graduation, in the Pons Uniswap V4 pool  |             2% |
| Sell on the Pons bonding curve or, after graduation, in the Pons Uniswap V4 pool |             2% |
| Wallet-to-wallet transfer                                                        |             0% |

The 2% has two parts, both charged by Pons:

| Part             | Rate | Who sets it                                |
| ---------------- | ---: | ------------------------------------------ |
| Pons trading fee |   1% | Pons protocol                              |
| Creator tax      |   1% | Chosen at launch and fixed forever by Pons |

Pons keeps 30% of its 1% trading fee — **0.3% of the trade value**. The other 70% of that fee and the whole 1% creator tax are **creator fees**, paid by Pons to the token's creator-fee recipient: **≈1.7% of the trade value**.

The creator-fee recipient of `$LOTRIO` is the team's **treasury wallet** — a wallet, not a contract. Its address is published at launch on [Launch status & official links](/trust-and-verification/launch-status.md).

## Where the creator fees go

| Destination                   | Share of creator fees | Equivalent share of trade value |
| ----------------------------- | --------------------: | ------------------------------: |
| Lottery pot                   |                   80% |                           1.36% |
| Team (marketing / operations) |                   20% |                           0.34% |

The Pons protocol share (0.3%) never reaches the project. The economic shorthand is:

```
2% trading fee = 0.3% Pons + 1.36% lottery pot + 0.34% team
```

### How the 80% reaches the lottery

Every 15 minutes, right before the draw, the keeper:

1. totals the creator fees accrued since the last draw — fees Pons has already credited to the treasury, plus pool fees Pons holds but has not swept yet, valued at each trade's ETH price;
2. sends 80% of that amount from the treasury wallet into the lottery contract. The lottery emits `TreasuryFunded(from, amount)` for every deposit;
3. leaves the remaining 20% in the treasury for marketing and operations (growth, the keeper's gas, RPC access and hosting).

Before graduation, Pons credits creator fees from bonding-curve trades to its fee escrow for the treasury. After graduation, fees accrue in the Pons Uniswap V4 pool hook and Pons sweeps them to the treasury **at most once per hour**. So the pot can grow every 15 minutes anyway, the keeper **pre-funds** the lottery from the treasury's own ETH using the trade-time estimate, then **reconciles hourly**: when Pons' sweep lands, the real credited amount replaces the estimate and later deposits are adjusted so the running total matches 80% of what was actually earned.

The pot shown on the website grows live as people trade and freezes at each draw.

If the 80% share for a round would leave the pot below **0.05 ETH**, nothing is deposited, the round is skipped and the amount keeps accumulating until a later round reaches the minimum. The same happens if fewer than three wallets are eligible.

{% hint style="warning" %}
**Trust model, stated plainly.** The lottery contract itself is ownerless and nobody can withdraw its pot. But the 80% deposit is made by the team's keeper from the team's wallet: it is an **operational commitment, not a rule enforced by code**. The treasury receives 100% of the creator fees first. What makes the commitment checkable is that every deposit is public and comes from the published treasury address.
{% endhint %}

### How to verify the deposits

Anyone can audit the 80% commitment on [RobinScan](https://robin.etherscan.io):

* every deposit is a `TreasuryFunded` event on the lottery contract with `from` = the published treasury wallet;
* creator fees credited to the treasury are visible as Pons fee-escrow `Credited` events for that recipient;
* over time, the sum of `TreasuryFunded` deposits should equal 80% of the creator fees earned (allowing for pool fees not swept yet);
* the website shows the live pot and every completed draw.

## 2. Completed pot

Once a draw is committed, its saved pot is split:

| Destination      | Share of committed pot |
| ---------------- | ---------------------: |
| 1st-place winner |                    50% |
| 2nd-place winner |                    30% |
| 3rd-place winner |                    15% |
| Buyback and burn |                     5% |

## Buyback and burn

At settlement, the lottery sends the 5% share to the buyback burner, a separate immutable contract. Its `buyAndBurn(minTokensOut)` spends the burner's whole ETH balance on `$LOTRIO` — on the Pons bonding curve before graduation and in the Pons Uniswap V4 pool afterwards — and sends every purchased token straight to the dead address `0x000000000000000000000000000000000000dEaD`. The call reverts if fewer than `minTokensOut` tokens would be burned.

* Only the keeper, the burner's immutable `operator`, can call `buyAndBurn`, so it can set a minimum output that protects the purchase against sandwich attacks.
* If the keeper has not burned for 7 days, anyone can call it, so the ETH can never be stuck.
* The burner has no owner and no withdraw function. ETH can leave it only as a `$LOTRIO` purchase.
* If the lottery cannot send the 5% to the burner, settlement still completes. That ETH stays in the pot, rolls into the next draw and the lottery emits `BuybackDeferred`.
* The buyback purchase pays the normal 2% Pons trading fee like any other buy, so 1.7% of it returns to the treasury as creator fees — and 80% of that flows back into the pot.

The `$LOTRIO` total supply starts at 1,000,000,000. Tokens sent to the dead address are permanently out of circulation, so the circulating supply decreases over time.

{% hint style="info" %}
Pons also offers its own optional buyback feature, which vests bought tokens to the creator over 5 years instead of burning them. That Pons feature is **disabled** for `$LOTRIO`. The 5% buyback and burn is a separate mechanism run by the project's own burner contract.
{% endhint %}

## Fixed by code vs. team commitments

**Fixed by Pons or by the immutable contracts:**

* starting token supply of 1,000,000,000, set by Pons;
* the 1% creator tax, fixed forever by Pons at launch;
* minimum 0.05 ETH pot and the 15-minute draw interval;
* 50% / 30% / 15% prizes and the 5% buyback and burn;
* token, transfer relay, buyback burner and excluded system addresses in the lottery, including the treasury wallet, which can never hold WIN POWER;
* the burner's token, keeper `operator` and 7-day public fallback.

**Operational commitments by the team (verifiable on-chain, not enforced by code):**

* moving 80% of the creator fees from the treasury into the lottery before every draw;
* keeping the published treasury wallet as the Pons creator-fee recipient;
* keeping Pons' own vesting buyback switched off.

{% hint style="info" %}
Production addresses will be listed on [Launch status & official links](/trust-and-verification/launch-status.md) at launch.
{% endhint %}


---

# Agent Instructions
This documentation is published with GitBook. GitBook is the documentation platform designed so that both humans and AI agents can read, navigate, and reason over technical content effectively. Learn more at gitbook.com.

## Querying This Documentation
If you need additional information that is not directly available in this page, you can query the documentation by asking a question.

Perform an HTTP GET request on the following URL with the `ask` and `goal` query parameters:

```
GET https://docs.lotrio.app/the-lottery/tokenomics.md?ask=<question>&goal=<user_goal>
```

`ask` is the immediate question: it should be specific, self-contained, and written in natural language.
`goal` is what the user is ultimately trying to achieve, the reason they need the answer. Sharing it helps GitBook give you a better, more relevant answer. A goal is most helpful when it describes the outcome the user wants rather than restating the question. For example, with `ask=how do I create an API token`, a goal like `automate deployments from our CI pipeline` lets GitBook tailor the answer to that use case.

The response will contain a direct answer to the question and relevant excerpts and sources from the documentation.

Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.