Treasury
Where protocol fees go, how the treasury is managed, and who controls it.
A portion of every borrower fee flows to the Monstro DAO treasury. The treasury is the financial reserve of the DAO, controlled by the same 5-of-7 multisig that owns the Based Loans contracts. It funds ongoing development, ecosystem support, and future governance decisions made by MONSTRO token holders.
Where fees come from
Two separate fees apply to every Based Loans borrower.
Protocol fee (2.49%): Deducted from the USDC the borrower receives when the loan opens. This fee is collected by the FeeDistributor contract and distributed across three tiers. It is paid regardless of whether the borrower buys back.
Term fee (2.5% / 5% / 7.5%): Added to the borrower's buyback cost. This fee is paid only if the borrower buys back their collateral. It goes entirely to the lenders who funded the loan as their yield. It does not flow to the treasury.
See Fees and terms for the full breakdown of both fees.
How the 2.49% protocol fee is distributed
The FeeDistributor splits the protocol fee across three tiers on every loan.
| Tier | Share | Recipients |
|---|---|---|
| Protocol tier | 1.30% | DAO treasury (0.95%) and Monstro Labs (0.35%) |
| Burn tier | 0.70% | MONSTRO buy and burn through the DAO bid (0.35%) and mUSDC vault (0.35%) |
| Growth tier | 0.49% | Per-asset ecosystem partners and integrators |
Protocol tier funds the operational expenses of the DAO and Labs: development, audits, oracle infrastructure, and ongoing maintenance.
Burn tier is routed through the AutoBurnSplitter contract. Half is injected into the mUSDC vault automatically, increasing the vault's yield for all mUSDC holders. The other half funds the Monstro DAO bid, which buys MONSTRO below the market price and burns it, reducing supply permanently. See the Monstro DAO Treasury page.
Growth tier is allocated per asset at listing time. Projects and partners who help build lender coverage for their token receive a share of fees generated by loans against that collateral, for a fixed duration. This is how Based Loans incentivises ecosystem growth without central coordination.
The split within the burn tier (MONSTRO vs mUSDC) is adjustable by the DAO council. The tier amounts themselves are set by the DAO owner multisig.
Who controls the treasury
The Monstro DAO treasury is controlled by the DAO's 5-of-7 multisig. No single signer can move funds unilaterally. Any disbursement from the treasury needs 5 of the 7 signers to approve it.
Treasury spending decisions are subject to Monstro DAO governance, meaning MONSTRO token holders have a say in how accumulated fees are used.
What treasury funds are used for
Treasury funds support the long-term health of the Based Loans protocol and the broader Monstro ecosystem. General uses include:
- Funding ongoing protocol development and security audits
- Supporting ecosystem grants and integrations
- Covering operational costs for oracle infrastructure and other services
- Funding future governance initiatives approved by the DAO
Specific treasury actions are governed by Monstro DAO processes. For full details on treasury management and wallet addresses, see the Monstro DAO documentation.
Summary
- The 2.49% protocol fee is deducted from borrowers at loan open and split three ways.
- Protocol tier (1.30%): DAO treasury and Monstro Labs, for operations and development.
- Burn tier (0.70%): mUSDC vault injections, plus MONSTRO buys and burns through the DAO bid, routed via AutoBurnSplitter.
- Growth tier (0.49%): per-asset allocations to ecosystem partners for a fixed duration.
- The treasury is controlled by the 5-of-7 DAO multisig. No unilateral withdrawals are possible.
- Full treasury details and wallet addresses are published at docs.monstrodefi.com.