LP-081: Fee Routing to LiquidLUX

Abstract

Defines the FeeSplitter contract that routes protocol revenue from the TreasuryV2 (LP-080) to downstream recipients. The primary split: 50% burn (deflationary, LP-079), 30% to the xLUX LiquidLUX vault (LP-094) as yield for stakers, and 20% to the DAO treasury for operational funding.

Specification

Split Ratios

Contract Interface

function distribute() external;
function setRatios(uint256 burnBps, uint256 vaultBps, uint256 daoBps) external onlyGovernance;
function recipients() external view returns (address burn, address vault, address dao);

• distribute() is permissionless. Splits the contract's LUX balance and forwards to each recipient.
• setRatios() requires governance timelock. Sum must equal 10,000 bps (100%).

Flow

TreasuryV2 -> FeeSplitter.distribute()
  |-- 50% -> DeadBurn (permanent destruction)
  |-- 30% -> xLUX Vault (increases xLUX exchange rate)
  |-- 20% -> DAO Treasury (operational fund)

Yield Mechanism

The 30% routed to the xLUX vault increases the LUX backing per xLUX token. xLUX holders receive yield without claiming -- the exchange rate appreciates over time.

Governance Bounds

The governance can adjust ratios within bounds:

• Burn: minimum 30%, maximum 70%
• Vault: minimum 10%, maximum 50%
• DAO: minimum 5%, maximum 30%
• Sum must always equal 100%

Security Considerations

1. distribute() is idempotent and permissionless. MEV extractors calling it early is harmless.

2. Ratio changes are subject to 7-day governance timelock.

3. Zero-balance distribution is a no-op (no revert, no gas waste).

4. The contract holds no persistent state beyond the ratio configuration.

Reference

Copyright

Copyright (C) 2025-2026, Lux Partners Limited. All rights reserved.

Licensed under the MIT License.