Yield & Fee Flows
Tharwa is designed to generate real-world yield — and to distribute it in a way that’s sustainable, transparent, and aligned with users.
Instead of relying on token emissions, dilution, or unsustainable incentives, the protocol earns yield from a diversified portfolio of real-world assets. That yield flows into the system and is allocated between users, stakers, and protocol reserves based on clearly defined logic.
This page explains where the yield comes from, who earns it, and how Tharwa sustains itself as a long-term ecosystem.
Where the Yield Comes From
Yield originates from Tharwa’s actively managed portfolio, which includes:
Sukuk and Shariah-compliant fixed-income (in designated vaults)
Global market assets like Sukuk, real estate, gold, and oil
Short-term credit and structured products (in higher-yield vaults)
The Confluence Engine dynamically adjusts exposure across these asset classes to optimize for real-world yield while minimizing tail risk.
Yield is realized off-chain and streamed back into the protocol at monthly intervals via trusted custodians and reporting systems.
How Yield Enters the System
Assets generate yield off-chain
Protocol custodians receive and convert earnings into stablecoins
Stablecoins are deposited into TharwaPool
Yield is allocated based on protocol logic
Yield Distribution Logic
Yield is split between the following parties:
sthUSD Holders
Reward for staking thUSD
Auto-streamed yield in thUSD
sTRWA Stakers
Share of protocol revenues
Rewards from fees + vault spread
Protocol Reserves
Buffer for peg defense + future growth
Treasury accumulation
This split is governed by vault-level parameters and can evolve through governance. In early phases, sthUSD receives the majority of net yield.
Protocol Revenue Streams
Tharwa generates protocol-level revenue from multiple sources:
Vault Spread A margin between expected portfolio return and distributed yield (e.g., if a vault earns 7%, Tharwa might distribute 6% to users, keeping 1% as protocol revenue)
Early Exit Fees (on Risk-On Vaults) When a user sells a vault token early via OTC, a percentage of the discount is routed to the treasury
OTC Trading Fees (Coming Soon) 2% fee on OTC stablecoin or vault token swaps
Redemption Spread thUSD redemptions may include a small buffer fee to prevent abuse and generate reserves
Staking Unlock Penalties Users exiting sTRWA early may incur a vesting penalty, which is partially burned and partially redirected to long-term stakers
Sustainability Mechanisms
Yield distribution is designed to be:
Net-yield backed only — no artificial inflation or emission farming
Adaptive — vaults with lower performance distribute less; high-performance vaults are more rewarding
Governance-aware — sTRWA stakers have oversight over how excess yield is used: rewards, buybacks, or reserve growth
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