> ## Documentation Index
> Fetch the complete documentation index at: https://docs.vibetoken.cn/llms.txt
> Use this file to discover all available pages before exploring further.

# How Vibe Token Distributes Revenue to Token Holders

> Each time your software generates revenue, Vibe Token automatically splits the founder's designated share proportionally across all token holders.

Every time a customer pays, Vibe Token does two things simultaneously: it mints tokens for whoever referred that customer (if applicable), and it distributes a share of the revenue to every current token holder. There is no monthly settlement, no batching delay, and no manual trigger. The revenue event itself is the distribution event.

## The Distribution Formulas

**Step 1 — Calculate the total distribution pool:**

```
D = α × dR
```

**Step 2 — Distribute pro-rata across all issued tokens:**

```
payout per token = D ÷ S
```

| Variable | Meaning                                                        |
| -------- | -------------------------------------------------------------- |
| `α`      | Founder's revenue share — set permanently at launch            |
| `dR`     | The revenue event amount in USD                                |
| `D`      | Total pool distributed to token holders this event             |
| `S`      | Circulating supply of issued tokens (treasury tokens excluded) |

## What Counts as "Issued" Supply

`S` includes only tokens that have been actively granted to contributors or earned through referrals. Tokens sitting in the founder's treasury — unissued, ungranted — are inert. They do not count toward `S`, and they do not receive any share of distributions.

This distinction matters: if the founder holds 10,000 treasury tokens and has issued 5,000 to contributors, `S = 5,000` — not 15,000.

## Worked Example

A customer pays **\$500**. The founder's revenue share is `α = 0.20`. There are **5,000 tokens** in circulation.

```
D = 0.20 × $500 = $100 total pool

payout per token = $100 ÷ 5,000 = $0.02

A holder with 200 tokens receives:
  200 × $0.02 = $4.00
```

The remaining **\$400** (the `1 - α` portion) stays with the business as operating revenue.

## Exit Queue Priority

When one or more contributors are waiting in the exit queue, their pending payouts are funded **first** from each distribution before the remainder flows to active holders.

If `D = $100` and `$60` is owed to queued exits, the queued exits receive their `$60` and the remaining `$40` is distributed pro-rata among current holders. The queue always takes precedence. See [Token Exit](/concepts/token-exit) for full queue mechanics.

## α Is Permanent

The founder sets `α` once at launch. It cannot be raised, lowered, renegotiated, or voted on after the fact. This permanence is a feature, not a limitation.

Contributors can model their future payouts with certainty. There is no scenario where the founder gradually reduces `α` to claw back revenue share as the business grows. The contract is immutable.

Choosing `α` at launch is therefore a significant decision. Common starting points range from `0.10` (10%) to `0.30` (30%), depending on how much of the business's growth the founder attributes to contributor activity.

## Distribution Frequency

Distributions happen automatically with each revenue event — not on a schedule. A business with daily transactions distributes daily. A business with monthly invoices distributes monthly. The cadence is entirely determined by how revenue flows into the business.

<Note>
  Treasury tokens held by the founder receive no distributions. The founder's economic return is the retained revenue: `(1 - α) × dR` per event. Keeping treasury tokens unissued does not increase the founder's distribution share — it simply keeps those tokens available for future grants.
</Note>