Marketplace Fees and $EDM Burn Mechanics

The two fees on a deal

A Marketplace-matched deal carries two protocol fees. The settlement fee is 0.5% on each milestone tranche, charged at the PASS event, native to the rail. The marketplace tier fee is 0.25% on financed principal per repayment event, charged to the financier, for marketplace-matched deals only. Externally-sourced deals (where the financier brought the counterparty) carry only the settlement fee; the marketplace fee is zero.

Both fees are subject to the same 50% burn rule. Every fee event splits 50% to the $EDM burn (posted on-chain with a hash) and 50% to the treasury (attestor incentives, network operations, ecosystem grants). The burn is constitutional: governance can tune treasury allocation but cannot redirect or eliminate the burn.

TWO FEES, ONE BURN RULEA marketplace-matched deal carries two protocol fees. Externally-sourced deals carry only the settlement fee. Every fee event splits 50/50 between $EDM burn and protocol treasury.

Per milestone · rail-nativeSettlement fee0.5%Charged at every settleTrancheOnPass event on the tranche amount. Per-tranche caps by deal size (see below): $5K up to $1M, $25K up to $5M, $50K above. Applies to every rail deal: marketplace or externally-sourced. Paid in EDSD at settlement.

Per repayment · financier-sideMarketplace tier fee0.25%Charged to the financier on financed principal at each repayment event. Marketplace-matched deals only; zero on externally-sourced. v1 collects via monthly accrual ledger (EDSD or fiat); v2 collects on-chain atomically at the EDSD settlement event.

The two protocol fees side by side. Settlement fee is rail-native and applies to every deal; marketplace fee is matching-layer and applies only to marketplace-matched deals. Both share the same 50% burn rule.

Per-tranche caps on the settlement fee

PER-TRANCHE CAPS BY DEAL SIZEThe 0.5% settlement fee applies linearly up to a per-tranche cap, then clips. Caps protect larger deals from disproportionate take rates and encourage high-value flow onto the rail.

BRACKET A$5K

Deals up to $1Mcap per tranche

Linear range0.5% applies cleanly on every tranche under $1M total deal value

Worked example (typical)$1M deal, four equal tranches of $250K. 0.5% = $1,250 per tranche. Well under cap; no clipping.

Worked example (skewed)$1M deal with one $900K tranche. 0.5% = $4,500. Cap binds; saves $500 vs uncapped.

BRACKET B$25K

Deals $1M to $5Mcap per tranche

Linear range0.5% applies cleanly on tranches up to $5M tranche value

Worked example (typical)$5M deal, four equal tranches of $1.25M. 0.5% = $6,250 per tranche. Under cap.

Worked example (skewed)$5M deal with one $5M tranche. 0.5% = $25,000. Cap binds; saves nothing here but prevents larger skews.

BRACKET C$50K

Deals over $5Mcap per tranche

Linear range0.5% applies cleanly on tranches up to $10M tranche value

Worked example (typical)$10M deal, four equal tranches of $2.5M. 0.5% = $12,500 per tranche. Under cap.

Worked example (whale)$20M deal with one $15M tranche. 0.5% = $75,000. Cap binds; saves $25,000.

Three deal-size brackets with their per-tranche fee caps and worked examples (typical and skewed-tranche cases). The cap protects larger deals from disproportionate take rates and encourages high-value flow onto the rail.

The burn mechanic

Every fee event splits atomically: 50% burns $EDM, 50% routes to the treasury. The burn is executed inside the same transaction as the settlement, with the burn hash recorded and emitted as part of the Receipt event. Auditors can replay every burn from L1; explorers show the running total. The 50% burn is one of the constitutional invariants the timelocked ParameterStore cannot override. Governance can adjust the treasury half allocation; it cannot reduce the burn half.

$EDM supply: 500M initial circulation, 100M long-run floor. As Marketplace volume grows, the burn rate accelerates; at $1B of annual settled flow, the burn alone removes ~$5M worth of $EDM (at 0.5% protocol fee, 50% burn, post-cap effective rate). The economic point is that $EDM value tracks rail volume, not speculation. Holders earn yield from real trade settlement, not from a marketing flywheel.

EVERY FEE EVENT, 50/50 ATOMICALLYEach protocol fee splits atomically inside the same transaction: 50% burns in $EDM with a posted hash, 50% routes to the protocol treasury. The 50% burn is constitutional; governance cannot reduce it.

Fee event · one tranche$125Example: 0.5% on a $25K Delivered tranche, well under the $5K per-tranche cap.

$EDM burn$62.50

Burned atomically in the same tx. Burn hash 0x9c1f…3a82 recorded on the Receipt. Removes $EDM from circulating supply; cannot be redirected or eliminated by governance.

Protocol treasury$62.50

Funds attestor incentives, network operations, ecosystem grants. Allocation is governance-adjustable within published bounds; the split between treasury sub-categories can tune but the burn half cannot.

Every protocol fee event, atomically: 50% burns in $EDM (with a posted burn hash recorded on the Receipt), 50% routes to the protocol treasury. The split happens inside the same transaction as the settlement; governance can tune the treasury allocation but cannot reduce the burn half.

Treasury T-bill sweep on Locked EDSD

While EDSD sits Locked across the four milestone tranches (typical lock duration: 30 to 90 days depending on corridor), the protocol does not let the funds idle. Approximately 75% of each Locked tranche sweeps into short-dated T-bills (70 to 100 day maturity); the remaining 25% stays as cash to maintain redemption availability. Interest accrues to the order ledger with a published Proof-of-Reserves attestation per epoch.

Interest accrues to the deal per the contract terms (typically the buyer, who funded the EDSD; configurable per deal). For a $100K, 60-day deal at 4.5% T-bill yield, the interest on the ~$75K swept portion comes to ~$555 across the deal life, posted to the ledger as treasury.interest.accrued events. The point is that capital does not sit dead during the lock period; the rail puts it to work, transparently, with verifiable reserves.

Worked example: a $100K deal

Buyer funds 100,000 EDSD; the protocol locks four milestone tranches at 30K + 30K + 25K + 15K. On-Board PASS fires settleTrancheOnPass: the 0.5% fee on 30K is $150, well under the $5K cap; $75 burns in $EDM, $75 routes to treasury; the 30K tranche flips Locked to Unlocked. Customs PASS: same math, $150 fee, $75 burn. Delivered: $125 fee, $62.50 burn. Arrival/QA: $75 fee, $37.50 burn.

Total: $500 in protocol fees, $250 burned in $EDM. Plus, on the marketplace side: 0.25% of the financed principal per repayment, so if the financier funded $80K of the $100K at 80% advance, the marketplace fees come to $200 across the four repayment events ($50 per event). On a $100K deal: ~$700 total protocol revenue, $350 burned in $EDM, ~$555 in T-bill interest accrued to the buyer. Compare to LC fees on the same lane: $1,000 to $3,000 in bank fees, 60 to 90 day cycle, paper docs, no audit trail.

THE $100K DEAL, BROKEN DOWNBuyer commits $100,000 EDSD. Four tranches release as milestones PASS. Per-tranche 0.5% protocol fee (capped), 50% of each fee burns in $EDM. Locked EDSD earns short-dated T-bill yield over the cycle.

+$100,000Buyer commits EDSD into escrow

Pre-Ship EMT mints. Funds Locked across 4 milestone tranches. ~75% swept to short-dated T-bills (70–100 days).

$30,000M01 · On-Board release

Title attestation passes the PoV Gate. settleTrancheOnPass fires.

−$1500.5% settlement fee on M01 tranche

−$7550% of fee burns in $EDM (M01)

Burn hash 0x9c1f…3a82 recorded on the receipt.

$30,000M02 · Customs release

Customs broker attestation. M02 EMT mints. Fee $150 (50% burns, $75).

$25,000M03 · Delivered release

Forwarder + terminal attestation. M03 EMT mints. Fee $125 (50% burns, $62.50).

$15,000M04 · Arrival/QA release (final)

Independent QA lab attestation. M04 EMT mints. Fee $75 (50% burns, $37.50).

+$432T-bill yield accrued on Locked EDSD

Posted to the order ledger as tranches release. Yield routes per the deal terms (typical: net to operator at M04).

$99,932Net to participants (after fees, plus yield)

Total protocol fee $500 (4 × $125 average), of which $250 burns in $EDM. $432 in T-bill yield. Operator and financier shares per the signed offer terms.

The same $100K deal waterfall from the deal-flow page, viewed through the fee-and-burn lens. Total protocol fee $500, of which $250 burns in $EDM atomically. T-bill yield on the Locked period adds another $432 to the deal economics.

v1 vs v2 fee collection

v1 (current architecture, ships with Stage 3 MVP): The 0.5% settlement fee is collected natively at every settleTrancheOnPass event (the rail does this on-chain regardless of marketplace involvement). The 0.25% marketplace tier fee is collected via accrual ledger; financiers receive a monthly statement and settle in EDSD or fiat. The accrual approach is forward-compatible with v2 and requires no operational change from the financier.

v2 (later in Stage 3 / early Stage 4): Both fees collect on-chain at the EDSD settlement event. The smart contract routes the marketplace fee directly to the protocol treasury at the same moment as the milestone tranche release. No monthly statement, no manual reconciliation, no fiat side. The settlement fee is unchanged at v1 vs v2; the marketplace fee just moves from accrual to atomic.

Where it stands today

The 0.5% settlement fee with per-tranche caps is live on mainnet since May 16, 2026. The 50% burn is enforced on every fee event, with running totals visible on the EDMA Explorer. The Treasury T-bill sweep is in production with Proof-of-Reserves published per epoch. The 0.25% marketplace tier fee launches with the Marketplace MVP in Stage 3 (Nov 2026 – Jan 2027), starting in v1 accrual mode and transitioning to v2 on-chain collection as the EDSD settlement infrastructure for marketplace deals stabilises.