# Business model

The economics of the RAYS application revolves around the RAX token, which is used to incentivize and reward various activities on the platform. Here's a breakdown of the different components of the RAYS economics and RAX tokenomics:

1. **Protocol commission:** The RAYS protocol charges a 10% commission on all investor profits generated through the use of xApps on the platform. This commission is used to fund the ongoing development and maintenance of the platform.
2. **Developer commission:** xApp developers also earn a 10% commission on all investor profits generated through their xApps. This incentivizes developers to build high-quality xApps that attract and retain investors.
3. **Referral program**: To incentivize user growth and network effects, RAYS offers a referral program where 0.1% of on-chain turnover in RAX is paid to the referrer (the one who invited the RAX follower). If there is no referrer, this amount is transferred to the DAO Fund.
4. **DAO Fund:** The DAO Fund is a community-managed fund that receives 0.1% of all on-chain turnover in RAX. Once a quarter, the DAO Fund is distributed proportionally among RAX stakeholders, or it can also be sent to incineration to reduce the circulating supply of RAX.
5. **Token burn:** To create scarcity and increase demand for RAX, 0.1% of all on-chain turnover in RAX is burned forever.

**Staking RAX tokens offers several benefits to users, including:**

1. Rate of return: RAX stakers can earn a rate of return in the neighborhood of 25% per annum.
2. Protocol income: RAX stakers receive quarterly distributions of up to 50% of protocol income.
3. DAO Fund: RAX stakers also receive quarterly distributions from the DAO Fund, which is formed from 0.1% of on-chain turnover in RAX.
4. Premium status: Holding at least 1000$ in RAX gives users Premium status, which reduces commissions by half on automated management of investor liquidity using our Account Abstraction Wallet.

To attract TVL (total value locked) to the platform, RAYS rewards users with rXP for TVL for xApps, which can be exchanged into RAX tokens. This incentivizes users to provide liquidity to the platform, which in turn attracts more investors and generates more revenue for the protocol and xApp developers.
