CLUE Economic Model

CLUE is a protocol where each transaction mechanically increases token scarcity through on-chain burn: part of each fee goes into a burn contract that burns CLUE tokens, and each participant who creates real value receives direct income.

Economic Rules

The model combines transparent fee distribution, role-based rewards, and DAO-controlled parameters to keep incentives aligned across creators, traders, moderators, arbitrators, referrals, and treasury governance.

3%Base trading fee

50%Fee share to burn treasury

500 CLUEMarket listing fee

10 slots / 25 seatsFee-discount staking model

OverviewPrinciplesRoles & IncentivesListing FeeStaking Discounts

Fee FlowDispute FlowStaking SystemGovernance FlowDeflation

Economic Model

• Market publication: 500 CLUE — immediately and entirely to moderators.

• Basic trading fee per trade: 3% (see fee-flow mechanics).

  The rate is fixed on-chain and changes only through DAO governance.

  Fee distribution:

  • Burn treasury: 50% fee → 1.50% of volume is burned via the buyback/burn circuit and deflation model.
  • To the market creator: ≈21.67% fee → ≈0.65% of volume (role context: market creator journey).
  • Arbitration (upon appeal): if appeal is confirmed, the creator share (≈0.65%) fee is forwarded to arbitrators proportionally to their weights, or the committee receives appellants’ appeal deposits (10% stake, minimum 100 CLUE, maximum 500 CLUE) for the specific arbitration case (see appeal threshold and arbitration payouts).
  • Moderators: ≈3.33% fee → ≈0.10% of volume (see moderation rewards and penalties).
  • Referrals: 25% fee → 0.75% of volume when referral partner is specified (see referral model).
  • DAO Rewards (if there is no referral): 25% fee → 0.75% of volume (see DAO rewards distribution).

All rewards are distributed among DAO participants in proportion to their effective weight model.

Economic Principles and Philosophy

• Reward for value created. The CLUE economy directs income to participants who develop the ecosystem: create quality markets, ensure fair procedures, and attract new audiences (see ecosystem flywheel).
• Turnover creates supply shortage. Part of fees is sent to burn mechanics. As trading activity increases, token circulation decreases.
• On-chain transparency and verifiability. Key economic flows and parameters are fixed in smart contracts, while changes are made only through DAO procedures.
• Growth flywheel. More quality markets + stronger referral activity → higher turnover → higher fee flow + higher burn volume → stronger incentives for active roles → more users and market creation (compare with ecosystem growth loop).

Why this matters for long-term token utility

The model is designed so protocol usage and token utility move together: more real activity means stronger fee flows, deeper role incentives, and reinforced scarcity mechanics.

Roles and Incentives: Who Benefits and Why

• Market creator gets 0.65% from event turnover and monetizes content quality/relevance (see creator role). If dispute escalates and appeal is confirmed, this share can be redirected to arbitration.
• Moderators receive fee-based rewards and publication processing compensation. Base share is ≈0.10% turnover, plus fixed publication fee 500 CLUE distributed by weights. Slashing applies for dishonest or systematically incorrect decisions (see moderation mechanics and stake slashing).
• Referral partner receives 0.75% from turnover of invited traders (see referral growth). If no referral is attached, this share goes to DAO Rewards.
• Trader uses continuous-liquidity AMM, pays transparent 3% fee, and can reduce costs via staking-based discount slots.
• Arbitrator joins in dispute escalation and receives rewards from arbitration flow, including redistributed creator share and appellant bonds per protocol rules (see arbitration case mechanics).
• DAO receives 0.75% in no-referral transactions, governs protocol parameters and treasury budget (including 40% emissions in DAO Treasury allocation), and is incentivized to support sustainable turnover and market quality.

Burn Treasury

50% of fee

Equivalent to 1.50% of trade volume at 3% base fee.

Creator

≈21.67% of fee

Equivalent to ≈0.65% of trade volume at 3% base fee.

Moderators

≈3.33% of fee

Equivalent to ≈0.10% of trade volume at 3% base fee.

Referral / DAO Rewards

25% of fee

Either to referral partner, or to DAO Rewards if no referral exists.

Market Listing Fee as an Access Economic Layer

Publishing each market costs P = 500 CLUE. This amount is 100% distributed among moderators who accepted the market for processing, in proportion to their rating/effective weights.

Designations

• K — number of moderators
• wₖ — active weight of moderator k
• W = Σwₖ — total weight sum

Publication fee distribution formula

Payout_pub(k) = 500 × (w_k / W)

Economic effects

• Payment for moderation creates a sustainable on-chain reward model without manual subsidies (see moderation reward pool).
• Input quality filtering reduces weak and spam market launches (see risk flags).
• Scalability increases moderator payments as publication volume grows and supports market quality circuit.

Current restrictions (see market lifecycle constraints):

• minimum market duration — 3 days
• minimum gap between bet stop and event occurrence — 3 hours
• maximum outcomes in one market — 15

Trading fee

Each trade of volume V is subject to base fee 3% (see fee-flow formulas). Effective fee with discounts:

f_eff = max(0, 3% - discount)

where discount is a personal discount from Fee Discount slots.

Actual fee paid

F_fee = V × f_eff

All shares below are calculated from F_fee. Possible rounding residues are routed to the burn portion (see split tail handling).

Fee split

• Burn Treasury — 50% fee, equivalent to 1.50% of V at 3% rate (see deflation circuit).
• To the creator of the market — ≈21.67% fee, equivalent to ≈0.65% of V at 3% rate (see creator remuneration model).
• Moderators — ≈3.33% fee, equivalent to ≈0.10% of V at 3% rate (see moderation rewards).
• Referral — 25% fee, equivalent to 0.75% of V if referral exists (see referral branch behavior).
• DAO Rewards — 25% fee in no-referral trades, equivalent to 0.75% of V (see DAO reward lane).

Example

• Transaction volume V: 100 000 CLUE
• Effective rate f_eff: 3%
• Fee F_fee: 3 000 CLUE

Distribution by example

• To market creator: 3 000 × 21.67% ≈ 650 CLUE
• Moderators: 3 000 × 3.33% ≈ 100 CLUE
• Referral partner: 3 000 × 25% = 750 CLUE (if referral exists)
• DAO Rewards: 3 000 × 25% = 750 CLUE (if no referral)
• Burn Treasury: 3 000 × 50% = 1 500 CLUE

If there is no referral, its fee share is sent to DAO Rewards. Burn share remains unchanged and is used to burn CLUE according to protocol burn rules.

Staking-Based Discounts (Fee Discount Slots)

The discount system is stake-ranking based. There are 10 slots and 25 seats in total. Slot parameters and distribution rules can be changed by DAO voting.

# slot	Discount	Capacity
1	99%	1st place
2	90%	1st place
3	80%	1st place
4	70%	2 places
5	60%	2 places
6	50%	2 places
7	40%	3 places
8	30%	3 places
9	20%	5 seats
10	10%	5 seats

• Discounts are fixed per slot: 99%, 90%, 80%, 70%, 60%, 50%, 40%, 30%, 20%, 10% (see slot model).
• Entry into a slot is possible when participant stake exceeds the minimum-weight participant in that slot (see rotation rules).
• Minimum stake lock period is 30 days, and unstaking cooldown is 7 days. These parameters are adjustable by DAO (see staking lock models).

DAO-first rule: all slot and discount parameters are determined and updated through DAO voting procedures.

Related Protocol References

To keep the economic model fully contextualized, use the sections below as canonical references for adjacent protocol domains:

• Overview & positioning: CLUE Overview, Ecosystem & Product
• Trading and fee execution: Market Mechanics, Fee Flow, Security invariants
• Moderation/disputes: Moderation model, Appeals and escalation, Arbitration payouts
• Staking circuits: Moderator/Arbitrator pool, Fee Discount pool, DAO staking
• Governance and treasury: DAO model, Proposal/treasury flow
• Token layer: Token utility, Deflation, Distribution
• Risk and legal perimeter: Risk framework, Legal structure and compliance