> For the complete documentation index, see [llms.txt](https://docs.mudigital.net/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.mudigital.net/mechanics/fees.md).

# Fees

The protocol earns fees through two primary means:

* **Fees on minting and redemption**: currently set at zero; any future change will be communicated on official channels
* **Performance fees** (share of yield generated by the protocol):
  * Mu Digital applies a performance-based fee designed to align the protocol’s incentives with users
  * The protocol earns fees only when users earn yield. A 10% performance fee is applied to realized net yield generated by Mu Digital strategies
  * For example, if a strategy generates 10% net annual yield, Mu Digital retains 1%, and users receive 9%
* There are **no management fees and no fees on principal**

Fees earned by the protocol will be used to deliver value to stakeholders and users including, but not limited to:

* **Insurance Fund:**  build up a liquidity buffer to further support the protocol
* **Ecosystem Growth:**  support integrations, partnerships, and other ecosystem initiatives
* **Token Buybacks:**  strategic buybacks in the future, post any potential Token Generation Event (“TGE”)