> For the complete documentation index, see [llms.txt](https://docs.alphafi.xyz/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.alphafi.xyz/alpha/fee-distribution-and-rewards.md).

# Fee Distribution & Rewards

ALPHA accrues value through two channels: SUI rewards paid to stakers, and buy pressure from protocol fee revenue.

### Fee Distribution

<div data-with-frame="true"><figure><img src="https://2739537216-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FwPwnxap9BEJ7YQDLsDOs%2Fuploads%2F1UlopomkCZ83AmniqtdO%2FChatGPT%20Image%20May%2026%2C%202026%2C%2004_54_34%20PM.png?alt=media&amp;token=89268058-efb8-4e5b-969b-61543577cc18" alt=""><figcaption></figcaption></figure></div>

The 20% performance fee splits this way:

* **50% → ALPHA Vault Rewards.** Paid to ALPHA Vault stakers in SUI, distributed every Sunday.
* **20% → AlphaFi Reserve.** Held by the protocol as a financial cushion.
* **5% → Liquidity.** Deepens the ALPHA-SUI trading pool.&#x20;
* **25% → Operations.** Funds team operations, audits, partnerships, and infrastructure.

<details>

<summary>Example</summary>

Suppose AlphaFi has $20M TVL earning an average 30% APY in the underlying pools. Annual gross yield is **$6M**. The 20% performance fee = **$1.2M / year**.

Of that:

* **50%** ($600K/year) → SUI rewards to ALPHA Vault stakers
* **20%** ($240K/year) → AlphaFi Reserve
* **5%** ($60K/year) → ALPHA-SUI liquidity
* **25%** ($300K/year) → Operations (team, audits, partnerships, infrastructure)

So roughly **$600K/year** in SUI flows to ALPHA stakers at $20M TVL. The amount scales with TVL.

(Numbers are illustrative. Actual TVL, APYs, and allocations vary.)

</details>

#### The fee → reward flywheel

1. A user deposits in a Strategy vault. The vault generates yield.
2. AlphaFi takes a 20% performance fee on that yield (see Strategies → Fees).
3. The fee is split — part of it pays SUI rewards to ALPHA Vault stakers, part is used to buy ALPHA on the open market, and part funds operations and reserves.
4. As TVL grows, fee revenue grows, and so do SUI rewards and ALPHA buys.

The rewards are funded by protocol revenue, not by minting new ALPHA.

#### Supply Dynamics

* The contract cannot mint new ALPHA. The 10M cap is final.
* Vesting unlocks follow a published schedule.
* Team tokens have a 300-day cliff before any unlocks.
* SUI rewards continue as long as the protocol generates fees, independent of ALPHA price.


---

# 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.alphafi.xyz/alpha/fee-distribution-and-rewards.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.