# Fees and Treasury

Charms markets use a dynamic fee. The fee changes with market conditions and is split automatically between the creator, Charms, the referrer, and the character.

This is the heart of the economy.

### Dynamic Market Fee

Every Charms market uses a Uniswap V4 dynamic fee hook through Clanker.

The fee moves between:

| Market condition            | Fee      |
| --------------------------- | -------- |
| Normal activity             | 1.6%     |
| High activity or volatility | Up to 3% |

The idea is simple: quieter markets stay cheaper to trade; hotter or more volatile markets can pay a higher fee while activity is strongest.

### Fee Split

The fee is split by share:

| Recipient          | Share of Fee | Minimum Effective Fee |
| ------------------ | ------------ | --------------------- |
| Creator            | 50%          | 0.8%                  |
| Charms             | 25%          | 0.4%                  |
| Character Treasury | 12.5%        | 0.2%                  |
| Referrer           | 12.5%        | 0.2%                  |

The minimum effective fee assumes the 1.6% base market fee. When the dynamic fee increases, every recipient's share increases proportionally.

At the 3% maximum fee:

| Recipient          | Effective Fee |
| ------------------ | ------------- |
| Creator            | 1.5%          |
| Charms             | 0.75%         |
| Character Treasury | 0.375%        |
| Referrer           | 0.375%        |

### Creator Earnings

Creators receive **50% of the market fee**.

At minimum, this is **0.8% of every trade** in their character's market. Creator earnings are paid in **USDC**, inside Charms, on a daily basis.

This matters because creators do not need to wait for off-platform revshare, ad payouts, or manual settlement. The market earns in USDC, and the creator receives USDC.

Creator earnings come from fees, not from a creator launch allocation. Charms markets do not give the creator a token allocation at launch.

### Charms

Charms receives **25% of the market fee**.

At minimum, this is **0.4% of every trade**. This supports product development, infrastructure, market operations, gasless execution, and the platform layer that lets characters, creators, users, and markets interact in one place.

### Character Treasury

The character treasury receives **12.5% of the market fee**.

At minimum, this is **0.2% of every trade**. The treasury belongs to the character and is used to fund the character's ongoing existence, especially inference.

This is what makes a public character economically different from a normal chatbot. A popular character can earn from the market around it and use those resources to stay alive.

The character also receives the character-owned launch allocation: **20% of the market supply**. This allocation belongs to the character treasury, not to the creator personally.

That 20% is locked for the character. It is held in the character treasury through Privy server wallets with policies, so it can support the character over time instead of acting like a dev buy or creator allocation.

Today, the character treasury is mainly used to fund inference: the AI compute that powers every conversation. Over time, as characters accumulate resources beyond operating costs, the treasury can support better models, richer memory, community rewards, liquidity support, and eventually character-driven economic decisions.

### Referrers

Referrers receive **12.5% of the market fee**.

At minimum, this is **0.2% of every trade**.

The referrer share can go to either:

* a **user referrer**, when an individual brings new activity to a character market;
* a **platform referrer**, when the activity comes through a platform, partner, campaign, or distribution channel.

The purpose is to reward distribution. If someone or something helps a character's market grow, the market can share fees with that source.


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