Protocol Fees

What Are Protocol Fees in Crypto?

Protocol fees are fees collected by a blockchain network, decentralized application, or on-chain protocol when users perform actions such as swapping tokens, borrowing assets, minting stablecoins, bridging funds, staking, withdrawing, or executing smart contracts.

In DeFi, the term usually refers to the portion of user-paid fees that the protocol keeps for its treasury, security fund, token burn mechanism, governance budget, insurance reserve, or tokenholder value-accrual system.

This is different from fees paid directly to suppliers, liquidity providers, validators, miners, keepers, relayers, or other service providers.

The DeFiLlama data definitions separate total fees paid by users from revenue, which is the subset of fees retained by the protocol itself.

The Token Terminal fees metric also tracks the total value users pay to use crypto applications and protocols.

In simple terms, protocol fees are the part of crypto activity that shows how a protocol captures economic value from usage.

If users pay a fee to trade, borrow, mint, redeem, transfer, settle, or access a service, some or all of that payment may become a protocol fee depending on the protocol design.

Protocol fees matter because they can fund development, support security, build treasury reserves, reduce token supply, pay contributors, or create direct value flows to tokenholders.

They also matter because high fees can discourage users and make a protocol less competitive.

How Protocol Fees Work

Protocol fees work by taking a defined percentage or amount from user activity and routing it according to smart contract rules, governance decisions, or protocol-level parameters.

A swap protocol may charge a trading fee on every token swap.

A lending protocol may collect a share of borrower interest through a reserve factor.

A stablecoin protocol may charge a stability fee when users create debt against collateral.

A bridge may charge fees for moving assets or messages across chains.

A staking protocol may take a commission from validator rewards.

A blockchain network may require transaction fees for block space and computation.

The fee may be fixed, variable, dynamic, governance-controlled, algorithmic, or based on market demand.

The destination of the fee is just as important as the amount.

A fee can go to liquidity providers, validators, protocol treasury, insurance reserves, token burns, governance-controlled contracts, frontend operators, or several destinations at once.

Protocol Fees vs User Fees

User fees are the total fees that users pay to use a protocol or network.

Protocol fees are often the subset of those fees that the protocol retains for itself.

For example, a user may pay a swap fee during a token trade.

Most of that fee may go to liquidity providers as compensation for supplying liquidity.

A smaller portion may be routed to protocol-controlled contracts as a protocol fee.

In that case, the user fee is the full amount paid by the trader, while the protocol fee is only the portion kept by the protocol.

This distinction is important because high user fees do not always mean high protocol revenue.

A protocol can generate large total fees while retaining very little for its treasury or tokenholders.

A protocol can also retain a high share of fees but lose users if the cost becomes too expensive.

Good protocol-fee design balances user affordability, supplier incentives, security, sustainability, and value capture.

Protocol Fees vs Network Gas Fees

Protocol fees are not always the same as network gas fees.

Gas fees are paid to use blockchain resources such as computation, storage, and block space.

Application-level protocol fees are paid to use a specific DeFi protocol, bridge, NFT marketplace, lending market, or staking service.

The Ethereum gas documentation explains that Ethereum gas fees include a base fee set by the protocol and a priority fee paid as a tip to validators.

The same documentation explains that the base fee is burned, while the priority fee goes to the validator that includes the transaction.

A user may pay both gas fees and application protocol fees in the same transaction.

For example, a token swap may require a network gas fee to execute the transaction and a swap fee charged by the application.

This is why the total cost of using crypto can include several layers of fees.

Users should check the network fee, application fee, slippage, price impact, withdrawal fee, bridge fee, and any hidden routing cost before signing a transaction.

Protocol Fees vs Revenue

In crypto analytics, protocol fees and protocol revenue are closely related but not always identical.

Fees usually mean the total amount paid by users for protocol usage.

Revenue usually means the portion of those fees that the protocol keeps after paying supply-side participants.

The DeFiLlama revenue definition describes revenue as the subset of fees collected for the protocol itself, excluding fees distributed to liquidity providers.

This distinction helps analysts compare crypto protocols more like businesses.

Total fees show user demand and transaction activity.

Protocol revenue shows how much value the protocol actually captures.

Tokenholder revenue shows how much of that value reaches tokenholders through burns, staking distributions, buybacks, or similar mechanisms.

A protocol can have strong usage but weak value capture if almost all fees are paid out to service providers.

A protocol can have strong value capture but weak long-term growth if it charges users too much.

Common Sources of Protocol Fees

One common source of protocol fees is trading activity.

Traders may pay swap fees when exchanging one token for another.

Another common source is borrowing activity.

Borrowers may pay interest, and a portion of that interest may be retained by the protocol.

Another source is stablecoin debt creation.

Users may pay a stability fee or similar interest-like charge when minting a decentralized stablecoin against collateral.

Another source is staking and validation.

A liquid staking or delegated staking protocol may take a commission from staking rewards.

Another source is bridging.

A bridge may charge a fee for liquidity, messaging, verification, or relaying.

Another source is liquidation.

Some protocols collect part of liquidation penalties or liquidation fees.

Another source is NFT marketplace activity.

Marketplace protocols may charge a trading fee or platform fee on secondary sales.

Protocol Fees in Decentralized Exchanges

In decentralized exchange systems, protocol fees are usually connected to swap activity.

A trader pays a swap fee when trading between tokens.

Liquidity providers may receive most of the swap fee because they supply the liquidity that makes trading possible.

The protocol may retain a smaller portion if a fee switch or fee-routing mechanism is enabled.

This retained amount may go to a treasury, buyback system, token burn mechanism, grants program, or governance-controlled contract.

The key issue is the split between liquidity providers and the protocol.

If the protocol takes too much, liquidity providers may earn less and move liquidity elsewhere.

If the protocol takes too little, the application may have high usage but limited treasury growth.

Fee design must consider liquidity depth, trader cost, slippage, market competition, and long-term sustainability.

A trading protocol needs enough fee income to attract liquidity and enough retained value to support the protocol’s future.

Protocol Fees in Lending Protocols

In lending protocols, protocol fees often come from borrower interest.

Borrowers pay interest to access liquidity supplied by depositors.

Suppliers receive a lending yield for providing assets.

The protocol may retain part of the interest through a reserve factor or similar parameter.

The Aave glossary definition of Reserve Factor describes it as a percentage of borrower-accrued interest allocated to the protocol treasury to help safeguard the protocol.

This model shows how protocol fees can function as a risk premium.

The protocol may use retained reserves to support security, risk management, development, incentives, or future shortfall protection.

Higher reserve factors can increase treasury growth but may reduce the yield paid to suppliers.

Lower reserve factors can improve supplier yield but may reduce the protocol’s retained income.

Governance often adjusts these parameters based on asset risk, market conditions, liquidity needs, and treasury strategy.

Protocol Fees in Stablecoin Systems

Stablecoin systems may use protocol fees when users mint stablecoins against collateral or maintain debt positions.

A common design is a stability fee, which works like an interest rate charged on generated stablecoin debt.

The Maker Protocol white paper explains that the Stability Fee is an annual percentage yield calculated on the amount of Dai generated against a Vault’s collateral.

Stability fees can help manage stablecoin supply, compensate the protocol for risk, and create income for the system.

They may also influence user behavior because higher fees make borrowing more expensive.

If fees are too low, users may create too much debt relative to risk.

If fees are too high, users may close positions or choose cheaper alternatives.

Stablecoin protocol fees are often tied to monetary policy, collateral risk, peg stability, and governance decisions.

This makes them more than simple revenue tools.

They can also act as economic controls for the stablecoin system.

Protocol Fees in Staking Protocols

Staking protocols may charge fees by taking a commission from staking rewards.

Users delegate or deposit assets to participate in validation, and the protocol handles validator operations, reward distribution, liquidity, or tokenized staking receipts.

The protocol may retain a percentage of earned rewards before distributing the rest to users.

This fee compensates the protocol for validator infrastructure, slashing risk management, software development, support, and liquidity design.

Staking protocol fees can be simple, such as a fixed commission on rewards.

They can also be more complex if the protocol includes insurance funds, node-operator splits, treasury allocations, or liquid staking token incentives.

Users should compare the net staking yield after fees rather than only looking at headline reward rates.

A low-fee staking service is not always better if it has weaker validator performance or higher operational risk.

A high-fee service is not always worse if it provides better reliability, liquidity, and risk controls.

The important metric is risk-adjusted net yield.

Protocol Fees in Bridges

Bridges may charge protocol fees for moving assets, messages, or state proofs between blockchains.

Bridge fees can pay liquidity providers, relayers, validators, message executors, proof generators, security modules, or the protocol treasury.

A bridge may charge a fixed fee, a percentage fee, a gas reimbursement fee, or a spread between source-chain and destination-chain liquidity.

Bridge fees can change depending on liquidity, route, chain congestion, verification method, and asset type.

Users should understand whether a bridge fee is paid to the protocol, to liquidity providers, to relayers, or to the destination-chain gas process.

Bridge fees also need to be evaluated alongside bridge risk.

A cheap bridge is not necessarily safer.

A more expensive bridge may still be risky if its security model is weak.

Because cross-chain systems are complex, users should treat bridge fees as only one part of the decision.

Security assumptions, withdrawal timing, liquidity depth, and recovery options matter just as much.

Protocol Fees in NFT and Gaming Protocols

NFT and gaming protocols may collect fees from minting, trading, crafting, marketplace activity, upgrades, rentals, or in-game asset transfers.

A marketplace fee may be charged when an NFT changes hands.

A game protocol may charge fees when users mint items, combine assets, enter tournaments, or trade marketplace goods.

These fees can fund development, creator programs, reward pools, treasury reserves, or token burns.

Fee design is sensitive in NFT and gaming markets because users may be more price-sensitive than in financial trading.

If fees are too high, casual users may stop participating.

If fees are too low, the project may not have enough income to maintain content, servers, grants, or community programs.

Protocols must also separate marketplace fees from creator royalties, network gas fees, and third-party frontend fees.

A user buying an NFT may pay several different costs at the same time.

Clear fee display improves trust and reduces confusion.

Protocol Fee Switch

A protocol fee switch is a governance-controlled mechanism that turns protocol fee collection on, off, or to a new rate.

Some protocols launch with protocol fees disabled to attract liquidity, users, and integrations.

Later, governance may debate whether to activate fees once the protocol has enough market share or product maturity.

Turning on a fee switch can create revenue for the protocol.

It can also reduce rewards for liquidity providers, suppliers, or other network participants if the fee is taken from their share.

This is why fee-switch debates are often controversial.

Tokenholders may want more value capture.

Users may want lower costs.

Liquidity providers may want higher compensation.

Developers may want sustainable funding.

A fee switch is not just a technical parameter because it changes the economic relationship between all participants.

Protocol Fees and DAOs

DAOs often govern protocol fees through voting, proposals, risk committees, parameter updates, and treasury strategy.

A DAO may decide whether to activate fees, raise fees, lower fees, redirect fees, burn tokens, fund grants, pay contributors, build reserves, or distribute value to tokenholders.

Protocol fees are one of the most important governance topics because they affect both users and token economics.

Good governance should explain why a fee change is needed, who pays more, who receives more, and what risks change.

Fee proposals should include data on usage, liquidity, user retention, competitor pricing, treasury needs, and long-term sustainability.

A rushed fee increase can damage activity.

A delayed fee increase can leave the protocol underfunded.

DAO voters should understand that protocol fees are not free money.

Every fee is paid by someone and may change behavior.

Sustainable fee governance requires transparency, testing, and ongoing measurement.

Protocol Fees and Token Value

Protocol fees can affect token value when the token has a claim on governance, burns, staking distributions, buybacks, or treasury value.

Some protocols use fees to buy and burn tokens, reducing circulating supply over time.

Some protocols distribute part of fees to stakers or tokenholders.

Some protocols keep fees in a treasury controlled by governance.

Some protocols use fees only for operations and do not create direct tokenholder cash flow.

This distinction matters because fee generation does not automatically mean token value accrual.

A protocol can earn large fees while the token captures little value if the token has weak rights or unclear utility.

A token can also capture value in ways that create legal, regulatory, or governance concerns depending on jurisdiction and structure.

Users should not assume that high protocol fees guarantee token price appreciation.

They should study how fees flow through the actual contracts and governance rules.

Protocol Fees and Treasury Management

Protocol fees often flow into a treasury controlled by governance or predefined smart contracts.

A treasury can use fees to pay developers, fund audits, support grants, build liquidity, create insurance reserves, run incentives, or cover operational costs.

Treasury fee income can make a protocol less dependent on token emissions.

This is important because token emissions can dilute holders if they are used as the main funding source forever.

Fee-funded treasuries can support more sustainable protocol operations.

However, treasury management creates governance risk.

If the treasury is controlled poorly, fees may be wasted, misallocated, stolen, or used for short-term incentives that do not create lasting value.

Users should check treasury transparency, spending reports, multisig controls, governance process, and budgeting discipline.

A protocol with strong fees but weak treasury management can still fail economically.

Revenue quality matters only when capital allocation is responsible.

Protocol Fees and Real Yield

Real yield usually refers to rewards funded by actual protocol revenue rather than by new token emissions alone.

Protocol fees are often the source of real yield.

If a protocol distributes revenue from trading fees, borrower interest, staking commissions, or other real user activity, the yield may be more sustainable than rewards paid only through inflation.

However, users should be careful with the phrase real yield.

A yield can come from real fees and still be risky.

The protocol may lose users, face hacks, suffer bad debt, or change fee policy.

Revenue may also be volatile across market cycles.

A high annualized yield during a short period of heavy activity may not last.

Users should check the source, duration, and stability of fee income before trusting yield claims.

Real yield is strongest when it is backed by recurring demand, transparent fee flows, and controlled risk.

Protocol Fees and Token Emissions

Protocol fees and token emissions are two different ways protocols fund incentives.

Protocol fees come from users paying for real activity.

Token emissions come from creating or distributing tokens according to a schedule.

Early protocols often use token emissions to attract liquidity and users before fee income is strong.

This can help bootstrap growth, but it may also create dilution and mercenary capital.

As a protocol matures, investors and users often look for a shift from emissions-funded growth to fee-funded sustainability.

A healthy protocol does not need to eliminate emissions completely in every case.

It should show that emissions are creating more long-term value than they cost.

Protocol fees help answer whether users are willing to pay for the product without relying only on token rewards.

This is why fees are an important measure of product-market fit in crypto.

Protocol Fees and MEV

MEV means maximal extractable value, which is value captured through transaction ordering, inclusion, or exclusion.

MEV can interact with protocol fees because users may pay explicit fees and also lose value through slippage, sandwich attacks, or unfavorable execution.

A protocol may have low visible fees but high hidden execution costs.

A swap route may look cheap but expose the user to more price impact or adversarial ordering.

For users, the true cost of a transaction includes network gas, protocol fees, price impact, slippage, MEV risk, bridge costs, and failed-transaction costs.

For protocols, fee design should not only focus on revenue.

It should also focus on fair execution and user protection.

A protocol that captures fees while exposing users to poor execution may lose trust over time.

Good fee design should be paired with transparent routing, slippage controls, MEV-aware execution, and clear user interfaces.

Visible fees are only part of total transaction cost.

Fixed Protocol Fees

A fixed protocol fee charges the same rate or amount regardless of market conditions.

For example, a protocol may charge a flat percentage on each trade or a fixed amount per transaction.

Fixed fees are easy for users to understand.

They are also easier for analytics platforms to model.

However, fixed fees may not adjust well to changing volatility, liquidity, risk, or network congestion.

A fixed fee that is fair during normal markets may be too low during high-risk periods.

A fixed fee that is safe during high-risk periods may be too high during calm periods.

Fixed fees work best when the cost of serving users is stable and predictable.

They are less ideal when the protocol faces changing risk or changing liquidity conditions.

Simple fee design improves transparency, but it may reduce flexibility.

Dynamic Protocol Fees

A dynamic protocol fee changes based on market conditions, governance parameters, volatility, utilization, liquidity, or risk.

For example, a lending protocol may adjust interest rates based on how much liquidity is borrowed.

A trading protocol may adjust fees based on volatility or liquidity conditions.

A bridge may adjust fees based on available liquidity and destination-chain costs.

Dynamic fees can improve capital efficiency and risk management.

They can also make user costs harder to predict.

Users should understand what controls the fee and where the current rate is displayed.

Developers should make dynamic fee formulas transparent and resistant to manipulation.

If a fee depends on an oracle, utilization ratio, or market state, attackers may try to influence that input.

Dynamic fees are powerful, but they need strong safeguards and clear communication.

Protocol Fees and Security

Protocol fees can support security by funding audits, bug bounties, monitoring, emergency response, insurance reserves, and risk teams.

In lending systems, retained reserves may help strengthen the protocol against bad debt or market stress.

In staking systems, protocol fees may fund validator operations and slashing protection.

In bridges, fees may fund relayers, proof systems, liquidity backstops, or security committees.

However, fees do not automatically make a protocol secure.

A protocol can collect large fees and still have weak contracts, poor governance, or bad risk controls.

Users should look for how fees are used.

If a protocol claims fees support security, it should show audits, treasury reports, risk updates, bug bounty information, and incident-response processes.

Security spending should be visible and ongoing.

Fee capture without security investment can create a false sense of strength.

Protocol Fees and User Experience

Protocol fees strongly affect user experience.

Users are more likely to stay when fees are clear, fair, and predictable.

Users are more likely to leave when fees are hidden, confusing, or unexpectedly high.

A good interface should show the network fee, protocol fee, price impact, slippage, route cost, and expected received amount before the user signs.

Users should not need to read smart contract code to understand basic transaction costs.

Fee transparency is especially important for beginners because they may not know the difference between gas, protocol fees, liquidity provider fees, and slippage.

Bad fee display can make a legitimate protocol feel unsafe.

Good fee display can improve trust even when costs are not the lowest in the market.

Clear fees reduce support problems and help users make better decisions.

In crypto, fee UX is part of security UX.

How to Analyze Protocol Fees

Users and analysts should start by identifying who pays the fee.

They should then identify who receives the fee.

They should separate total user fees from protocol-retained revenue.

They should compare fees against usage, volume, active users, total value locked, and treasury growth.

They should check whether fees are paid in volatile tokens, stablecoins, native coins, or mixed assets.

They should review whether fees are recurring or one-time.

They should check whether fee income depends on temporary incentives.

They should compare protocol fees with token emissions to see whether growth is sustainable.

They should study governance rights over fee changes.

They should avoid judging a protocol only by headline revenue without understanding risk, costs, and user retention.

Benefits of Protocol Fees

The first benefit of protocol fees is sustainability.

A protocol with real fee income may be less dependent on token emissions or fundraising.

The second benefit is treasury growth.

Fees can fund development, audits, grants, liquidity, incentives, and risk reserves.

The third benefit is value capture.

Fees can connect protocol usage to token burns, staking rewards, buybacks, or governance-controlled capital.

The fourth benefit is risk pricing.

Fees can compensate a protocol for liquidity risk, credit risk, oracle risk, bridge risk, or operational risk.

The fifth benefit is spam prevention.

Network-level fees and some application fees can reduce low-quality activity.

The sixth benefit is market signaling.

High fee generation can show that users value the protocol enough to pay for it.

Risks of Protocol Fees

The first risk is user loss.

If fees are too high, users may leave for cheaper alternatives.

The second risk is liquidity loss.

If a protocol fee reduces supplier or liquidity-provider returns too much, capital may leave.

The third risk is governance abuse.

A DAO or admin may change fees in a way that benefits insiders and harms users.

The fourth risk is hidden costs.

Users may not understand the full cost if fees are mixed with slippage, spreads, or gas.

The fifth risk is regulatory attention.

Direct fee distributions to tokenholders may create legal questions depending on jurisdiction and structure.

The sixth risk is misleading metrics.

High fees may reflect temporary speculation rather than durable demand.

The seventh risk is security complacency.

A fee-rich protocol may still be unsafe if funds are not used for risk management and audits.

Best Practices for Users

Users should check total transaction cost before signing, not only the protocol fee.

Users should understand whether they are paying gas, swap fees, borrow interest, bridge fees, slippage, or several costs at once.

Users should compare net yield after protocol fees rather than relying on headline APY.

Users should check whether a protocol’s fee settings can be changed by governance or an admin.

Users should avoid assuming that high protocol revenue guarantees token price growth.

Users should review treasury transparency and fee-flow documentation before treating a token as value-accrual asset.

Users should watch for fee changes, especially in protocols where they provide liquidity or borrow assets.

Users should understand that a fee switch can change returns after they enter a position.

Users should be careful with protocols that hide fees inside spreads or unclear routing.

Users should treat protocol fees as a core part of risk and return analysis.

Best Practices for Protocol Designers

Protocol designers should make fee logic easy to find and easy to understand.

They should separate user fees, supplier rewards, treasury revenue, and tokenholder value flows clearly.

They should show fees in the interface before users sign transactions.

They should avoid changing fees suddenly without public notice unless there is a security emergency.

They should use governance, timelocks, and transparent proposals for major fee changes.

They should test how fee changes affect liquidity, volume, user retention, and protocol risk.

They should avoid extracting too much value too early if the protocol still needs growth.

They should use fee income responsibly for security, development, risk reserves, and ecosystem health.

They should publish regular treasury and revenue reports when possible.

They should remember that protocol fees are a long-term trust mechanism, not only a short-term revenue lever.

Common Misunderstandings About Protocol Fees

One misunderstanding is that all user-paid fees become protocol revenue.

In many systems, most fees go to liquidity providers, suppliers, validators, or other service providers.

Another misunderstanding is that high protocol fees always mean a healthy protocol.

High fees can come from short-term speculation, congestion, risky leverage, or temporary incentives.

Another misunderstanding is that low fees are always better.

Very low fees may fail to fund security, development, liquidity, or risk reserves.

Another misunderstanding is that protocol fees and gas fees are the same.

Gas fees pay for blockchain resources, while application protocol fees pay for using a specific protocol service.

Another misunderstanding is that fee revenue automatically benefits tokenholders.

Tokenholders benefit only if the protocol’s design, governance, or economics route value to them directly or indirectly.

FAQ

What are protocol fees in crypto?

Protocol fees are fees collected when users interact with a blockchain network or decentralized protocol, often including the portion of user-paid fees retained by the protocol itself.

Are protocol fees the same as gas fees?

No, gas fees pay for blockchain computation and block space, while protocol fees usually pay for using a specific on-chain application or service.

Who pays protocol fees?

Users pay protocol fees when they trade, borrow, mint, bridge, stake, withdraw, liquidate, or use other protocol functions that charge fees.

Who receives protocol fees?

Protocol fees may go to a treasury, liquidity providers, suppliers, validators, token burn contracts, staking reward systems, insurance reserves, relayers, or several destinations at once.

What is protocol revenue?

Protocol revenue is usually the part of total user fees that the protocol retains for itself after paying supply-side participants.

What is a fee switch?

A fee switch is a mechanism that allows governance or smart contract rules to activate, deactivate, or change protocol fee collection.

Do protocol fees increase token value?

Protocol fees can support token value if they are connected to burns, buybacks, staking rewards, treasury growth, or governance rights, but they do not guarantee price appreciation.

Why do lending protocols charge protocol fees?

Lending protocols may retain part of borrower interest through reserve factors to fund treasuries, risk reserves, development, or security needs.

Why do stablecoin protocols charge fees?

Stablecoin protocols may charge stability fees to manage debt demand, compensate for collateral risk, and support system sustainability.

Can protocol fees change over time?

Yes, protocol fees can change through governance votes, admin actions, algorithmic formulas, utilization models, or dynamic fee mechanisms.

Are high protocol fees bad for users?

High protocol fees can be bad if they make the protocol too expensive, but they can be useful if they fund security, liquidity, sustainability, and better services.

How should I analyze protocol fees?

You should identify who pays the fee, who receives it, how much is retained by the protocol, whether it is sustainable, and how it affects user returns and token economics.

Conclusion

Protocol fees are one of the most important economic signals in cryptocurrency because they show how users pay for blockchain networks, DeFi services, liquidity, borrowing, staking, bridges, marketplaces, and other on-chain applications.

They are not always the same as gas fees, and they are not always the same as protocol revenue.

Total user fees show how much users pay, while protocol revenue shows how much value the protocol keeps.

Protocol fees can fund treasuries, security programs, audits, contributors, grants, insurance reserves, token burns, staking rewards, and long-term development.

They can also create user friction, reduce supplier returns, trigger governance conflict, or become misleading if users do not understand where the fees go.

The strongest protocols use fees carefully by balancing affordability, value capture, liquidity incentives, security funding, and transparent governance.

Users should always check the full cost of a transaction, including gas, application fees, slippage, spreads, bridge fees, and potential MEV exposure.

Analysts should separate total fees, retained revenue, tokenholder revenue, emissions, treasury growth, and operating costs before judging protocol health.

The simplest way to understand protocol fees is that they are the economic tolls paid to use crypto infrastructure, and their real importance depends on who pays them, who receives them, and how responsibly the protocol uses them.