Fees & revenue
Fees & revenue
Tessera has no token sales, no deposit fees, no withdrawal fees, and no trading volumes. Revenue comes entirely from a single, transparent source: the reserve factor on borrow interest.
The reserve factor
When a borrower pays interest on their USDC debt, 15% of that interest flows into an on-chain reserve. The remaining 85% is earned by lenders as yield.
| Parameter | Value | Purpose |
|---|---|---|
| Reserve factor | 15% of borrow interest | Protocol revenue + first-loss capital |
| Close factor | 50% max liquidatable per step | Limits liquidation severity |
| Liquidator bonus | 5% base (ramps with depth) | Backstop liquidation incentive |
| Minimum debt | 100 USDC | Dust floor |
That reserve serves two purposes: (1) it is protocol revenue, used to fund operations and development, and (2) it acts as first-loss capital -- a buffer that absorbs losses before they reach lenders. This means lender yield is protected by an on-chain reserve, not by insurance or a promise.
How interest accrues
Interest is calculated continuously, at a variable rate. The rate adapts to utilization (how much USDC is borrowed vs. available): at low utilization, rates are low; as more borrowers borrow, rates rise to incentivize deposits or repayment. A hard ceiling of 300% annual prevents runaway rates.
On-chain logic deducts the reserve factor in real time. When you check your debt, you see the true amount including accrued interest and reserve deduction -- no surprises.
No deposit or withdrawal fees
Lending USDC to Tessera is free. No deposit fee. No withdrawal fee. Your yield is simply 85% of the borrow interest across the pool, prorated by your share.
No trading or market-making fees
Tessera is not an exchange. Collateral (tokenized stocks) is not traded on-chain; it is held as collateral. There are no trading fees, no slippage, no AMM mechanics. You borrow USDC against your tokens; the tokens stay locked in your own vault position.
The Watcher's costs
The Watcher operates from the reserve. When it repays debt on your behalf (with your pre-approval and on-chain per-user caps), it uses the allowance you grant -- it does not charge a fee above the normal borrow interest. A 15% reserve factor is sustainable: it is enough to fund a small, focused team and shield lenders from catastrophic loss, without creating perverse incentives (like token-sale pressure) or rent-extracting fee structures. It is also honest -- you know where every dollar of revenue comes from.