# Revenue Model

**Mirror generates protocol revenue from realized profits earned by the treasury’s capital deployed across diversified, AI-operated trading vaults.**\
**Profits are recognized at epoch close and routed on-chain per policy (buybacks, treasury compounding, safety reserves).**

#### 1) Protocol-Owned Capital

The treasury allocates capital across uncorrelated strategies under a single AI trading engine.

#### 2) Realized Profit → Revenue

2.1 At each epoch, the system computes Realized Net PnL (after trading fees, funding/borrow, gas/oracle, and slippage).\
2.2 Only positive PnL above carryforward/high-water marks is recognized as protocol revenue.\
2.3 No profit → no revenue recognized for that epoch.

#### 3) Policy-Driven Routing

Recognized revenue is directed to:\
3.1 Programmatic Buybacks (e.g., TWAP/SOR as configured),\
3.2 Treasury Compounding & R\&D (models, audits, infrastructure, integrations),\
3.3 Safety Reserves (venue/oracle anomalies, tail-risk coverage).


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