# Profit Distribution

## Sources of profit

The Malt ecosystem generates profit through various means:

* Fees
* Arbitrage profit
* Seigniorage (profit from Malt supply changes)
* Swing Trader buying/selling Malt below/above peg
* Other methods introduced in the future

## How profits are shared

Any profit made within the system will get passed to the profit distributor. It is this contract that handles how to split the profit up. These are the places that get considered:

* Increasing protocol collateral
* Paying LPs
* Treasury
* Potentially to a DAO in the future

These are the factors that are taken into consideration when deciding how to distribute the funds:

* The current collateral ratio for the Malt stablecoin
* The current target APR for the rewarded asset's pool
* The current runway capital held by the reward overflow for the rewarded asset's pool

In general profit is distributed pro-rata between collateral and LPs by comparing how much capital is needed to bring collateral to 100% and how much is needed to reach the desired runway for the current pool.

![Profit Flow](/files/MApWHnyYPNoNDwP7WBgP)


---

# Agent Instructions: Querying This Documentation

If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question.

Perform an HTTP GET request on the current page URL with the `ask` query parameter:

```
GET https://docs.malt.money/the-malt-ecosystem/profit_distribution.md?ask=<question>
```

The question should be specific, self-contained, and written in natural language.
The response will contain a direct answer to the question and relevant excerpts and sources from the documentation.

Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.