> For the complete documentation index, see [llms.txt](https://surf-2.gitbook.io/surfliquid-docs/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://surf-2.gitbook.io/surfliquid-docs/usdsurf-token/xp-and-reward-distribution.md).

# XP and Reward Distribution

<figure><img src="/files/mfVeaVAYJ8Qa6A5jRXvO" alt=""><figcaption></figcaption></figure>

Surf Leagues uses XP as the core accounting unit for contribution, reputation, and reward allocation.

XP is not a token. It is a non-transferable on-chain score that measures how much value a user creates for the ecosystem over time.

XP determines:

* Leaderboard rank
* Share of season rewards
* Access to advanced vaults and vault products
* Weighting in future governance and participation rights

This separates participation from speculation and ensures rewards flow to behaviour, not just balance.

***

### **XP Sources**

<figure><img src="/files/5G5Q1cKdRzEFxflkLdUk" alt=""><figcaption></figcaption></figure>

XP is earned from real economic activity:

#### **1. Capital Deployment**

Depositing assets into Surf vaults generates continuous daily XP.

XP scales with:

* Amount deployed
* Time deployed
* Vault type and risk class

#### **2. Staking**

Staking $SURF generates daily XP.

This aligns long-term protocol participants with growth and stability.

#### **3. Trading Activity**

Trading $SURF on supported venues generates XP based on on-chain volume.

This rewards liquidity provision and market participation.

#### 4. Referrals

Direct referrals earn an instant XP bonus on activation.

Ongoing network activity generates a passive XP stream via second-order rewards, creating a compounding growth loop.

#### 5. Ecosystem Participation

Future sources will include:

* Vault creation
* Governance participation
* Liquidity routing
* Institutional and partner integrations

All XP is tracked automatically. No forms, no manual claims.

<figure><img src="/files/yiKVJmyRSyuJBGDV3K14" alt=""><figcaption></figcaption></figure>

***

### **Multipliers**

XP weighting adjusts based on contribution quality and alignment:

* **Vault class multipliers**

  Advanced and higher-capacity vaults generate higher XP per dollar than base vaults.
* **Season participation multipliers**

  Long-term consistency across a full season increases effective XP weight.
* **Network multipliers**

  Referral tree depth and sustained activity increase second-order XP flow.
* **Access tier multipliers**

  Gated vaults and high-performance strategies carry higher XP velocity.

Multipliers reward behaviour that increases TVL stability, liquidity depth, and protocol resilience.

***

### **Treasury Flow**

Surf operates two coordinated treasuries:

#### 1. Protocol Treasury (Creator.Bid Safe Wallet)

Funded via:

* 2% of the 3% secondary market sell fee
* Used for:
  * Core development
  * Infrastructure
  * Security
  * Team operations
  * Ecosystem growth

#### 2. Surf Treasury (Vault Performance Layer)

Funded via:

* 10% performance fee on realised yield
* Realised profits across active vaults
* Used for:
  * Market buybacks of $SURF
  * Strategic liquidity
  * Long-term capital buffers
  * Future incentive programs

Treasury flows are on-chain, auditable, and rule-governed.

***

### **Fee Routing**

Surf has two distinct fee streams:

#### Performance Fees (Vault Layer)

* 10% of realised profits across active vaults
* Used to:
  * Buy back $SURF from the open market
  * Accumulate protocol reserves
  * Support long-term deflation and capital efficiency

#### Protocol Fees (Token Layer)

* 3% sell fee on secondary market trades
  * 2% routed to the Surf Safe Treasury for operations
  * 1% routed to [Creator.Bid](https://creator.bid) protocol for infrastructure sustainability

These fees are:

* Non-inflationary
* Non-custodial
* Automatically enforced by smart contracts
* Fully transparent and auditable

***

### **Reward Distribution Logic**

Season rewards are distributed based on:

> XP share = User XP ÷ Total Season XP

Final $SURF allocation per user is proportional to their contribution across:

* Capital deployed
* Time active
* Vault participation
* Network growth
* Long-term alignment via Flyover and staking

This creates a closed-loop system:

> Usage → XP → Rank → Rewards → Reinvestment → Higher Future Access

Not emissions farming. Not short-term extraction.\
**A compounding participation economy aligned with real on-chain value creation.**