Protocol Fee

A protocol fee refers to a charge levied on users by the underlying infrastructure of a network for using its services. On Pheasant Network, this is one of two fees charged to users, the other being the relayer fee. 

The objectives of protocol fees can vary, but they generally serve two primary purposes. First, they provide compensation and rewards. Protocol fees often compensate network contributors, such as blockchain validators or rollup sequencers, for the computational power and security they provide. These fees also act as incentives, encouraging their continued participation and service.

Second, they support project development. In some projects, protocol fees are allocated to the treasury to fund development. These funds may be used to pay personnel, support community and governance activities, or cover other expenses essential for the protocol’s growth.