Tokenomics

NFTH generates revenue through two streams that fund market making and protocol development.

Revenue Streams

1. Protocol Fees (Targeted Redeems)

When users pay the 5% targeted redeem fee, the vTokens go to the protocol's fee distributor contract. These fees are denominated in the vault's vToken and accumulate over time.

2. HyperCore Trading Fees

Each vToken is bridged to HyperCore for native order book trading. The protocol earns a share of all trading fees on these spot pairs via the deployer fee share mechanism.

Fee Source	Denomination	Frequency
Targeted Redeems	vTokens	Per redeem
HyperCore Trading	USDC	Per trade

How Fees Fund the Protocol

Targeted Redeem Fees (vTokens)
        │
        ▼
Fee Distributor Contract
        │
        ▼
Market Making + Protocol Treasury
        │
        ▼
Deeper Liquidity for Users


HyperCore Trading Fees (USDC)
        │
        ▼
Deployer Fee Share
        │
        ▼
Market Making Operations
        │
        ▼
Tighter Spreads + Better Prices

The flywheel: Protocol fees fund market making, which provides liquidity, which attracts more traders, which generates more fees.

Why Market Making Matters

Market making is essential for NFT fractionalization to work. Without active liquidity:

vToken prices diverge from NFT floor prices
Arbitrage becomes impossible
The protocol loses its core value proposition

By funding market making through protocol revenue, NFTH ensures deep, sustainable liquidity for every supported collection.