> For the complete documentation index, see [llms.txt](https://docs.lendsprotocol.com/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.lendsprotocol.com/earn-with-lends/fees-and-revenue.md).

# Fees & Revenue

### User Fee Summary

| Action                   | Configured protocol fee | What the user should know                                                                                      |
| ------------------------ | ----------------------: | -------------------------------------------------------------------------------------------------------------- |
| Deposit stock collateral |                      0% | Network gas and any external token-acquisition costs still apply                                               |
| Borrow leUSD             |                1.5% APR | Accrues continuously on outstanding debt                                                                       |
| Repay leUSD              |                0% extra | Payment covers accrued fees first, then principal                                                              |
| Withdraw collateral      |                      0% | Allowed only if the remaining position is not liquidatable                                                     |
| Convert USDG to leUSD    |                      0% | 1:1 through the PSM, subject to its cap                                                                        |
| Redeem leUSD for USDG    |                      0% | 1:1 when idle USDG and safety conditions allow                                                                 |
| Stake or unstake leUSD   |                      0% | Unstaking has a cooldown and claim window                                                                      |
| Liquidation              |              8% penalty | Value is taken from the liquidated collateral                                                                  |
| Buy or sell $LENDS       |                  5% fee | Applies to $LENDS trading through the fee-enabled pool, see [$LENDS Token](/earn-with-lends/usdlends-token.md) |

### Where Protocol Revenue Comes From

The protocol can realize revenue from:

1. **Stability fees** paid by borrowers.
2. **Liquidation revenue** remaining after the protected debt and borrower-surplus rules are applied.
3. **USDG reserve yield** realized above the principal that backs PSM-issued leUSD.
4. **Other explicitly routed protocol income.**

### The Revenue Waterfall

Realized revenue follows a solvency-first order:

1. **Repair bad debt.** Bad debt is being repaid if exists before other distributions.
2. **Build insurance.** A configured**\*** share funds the insurance reserve until its target is reached.
3. **Fund sleUSD yield.** Remaining revenue is allocated to stakers up to the accrued target.
4. **Record protocol revenue.** Eligible surplus above the staker target is reserved for protocol purposes, including $LENDS buybacks.

**\*** The configured insurance share is 20% of eligible revenue until the fund reaches its target of 10% of borrower debt.

### What the 6% sleUSD Target Means

The protocol tracks a target revenue amount based on:

* the oUSD managed by the staking vault
* the configured 6% annual target
* time elapsed

When revenue is realized, stakers can receive up to the amount currently due under that target. If more revenue is collected, the surplus becomes protocol revenue after prior waterfall obligations are satisfied.

### Protocol Revenue and $LENDS Buybacks

A portion of realized protocol revenue is intended to buy $LENDS from the market. Revenue can be released for that purpose after required safeguards are satisfied, including the absence of bad debt and sufficient idle PSM reserves.

Future $LENDS staking is planned to let holders share part of protocol revenue more directly. It is not an active feature until an official launch and the relevant contracts are announced.


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