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

# Protocol

THX Network uses a protocol that provides incentives for completing quests, providing liquidity and staking Balancer Pool Tokens (BPT).

### 1. Campaign Manager Fee Distribution

Campaigns running on THX Network pay **Campaign Manager Fees**. Which consist of a **Subscription Fee** and a **Protocol Fee**. The ratio of these will be determined by on-chain voting in a future version of the protocol. Currently the ratio is set as follows.

#### Example of a 100 USDC Campaign Manager Fee

* **30 USDC** is transferred to the Company Safe as the **Subscription Fee** for providing centralized infrastructure and the front-end
* **70 USDC** is charged as the **Protocol Fee** and provided as liquidity (Balancer 80THX-20USDC) resulting in **BPT**
  * **80% BPT** is transferred to veTHX Reward Distributor which allows [veTHX](/tokenomics/locking-usdthx-to-usdvethx.md) holders to claim them, this is called **Protocol Incentives**
  * **20% BPT** is used for quest incentives for individual campaign participants called **Participant Incentives**

<figure><img src="/files/e8IaiM29mEI0Ka7Fqq1l" alt=""><figcaption><p>Diagram showing how customer payments are turned into liquidity and used as protocol and product incentives.</p></figcaption></figure>

### 2. Protocol Fee Collection <a href="#pool-registry" id="pool-registry"></a>

Incentives earned with completing quests or staking $THX allow for more reward claims from the veTHX Reward Distributor.

#### Claim Tokens

With a weekly distribution schedule campaign participants will be able to claim tokens for their share of veTHX.

#### Lock (Stake)

Participants can lock (stake) BPT in the veTHX system. This will earn them more BPT rewards in the veTHX Reward Distributor.

#### Withdraw

Participants can withdraw their staked BPT in the veTHX system. Early withdraws will get a penalty relative to the amount of time until lock end.

<figure><img src="/files/n3IjnUcjDN5VE8WHEbkh" alt=""><figcaption><p>Diagram showing how participants can claim rewards and (re-)stake or withdraw them.</p></figcaption></figure>

**(deprecated) Protocol fees**

During beta phase each Campaign Safe generated fees when quests that transferred ERC20 tokens were completed or tokenized assets were redeemed. These fees were collecected in the Fee Collector (Polygon)

{% embed url="<https://polygonscan.com/address/0x802505465CB707c9347B9631818e14f6066f7513?__cf_chl_tk=77oB2a0TutEigCTfvppHDFHvC52X3lVFNV.VURaDWZI-1703152422-0-gaNycGzNECU>" %}
Block explorer page of Fee Collector contract.
{% endembed %}

## Governance

THX holders govern protocol parameters and improvements, including managing the Community Treasury, and Incentives, as well as fees. Initially, governance uses gasless voting using [Snapshot](https://snapshot.org/#/thxprotocol.eth), eventually transitioning to on-chain governance.

For most recent community discussion see the [Governance Forum](https://gov.thx.network/).

dl