Treasury And Risk Management

The Pi Protocol treasury is responsible for managing protocol revenue, incentive programs, and systemic risk coverage.

Revenue is primarily generated through a 20% fee on yield payments from the underlying RWAs. These fees are routed to the treasury and allocated across three key areas:

• Development Reserve – to support new features, vault types, and ecosystem integrations.

• Loss Reserve Pool – to absorb potential defaults from RWAs, particularly in the IIA segment.

• Protocol Rewards – for staking, liquidity provision, and governance participation.

Risk is actively monitored through smart contracts and governed thresholds. If the value of collateral falls or default risk rises, the protocol can adjust minting caps, haircut rates, or halt vaults altogether.

The treasury can also intervene to buy back USP during times of de-pegging or allocate funds to defend ecosystem liquidity. All decisions related to reserves, rewards, and interventions are subject to USPi token holder governance.