> For the complete documentation index, see [llms.txt](https://airewardrop.gitbook.io/air3/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://airewardrop.gitbook.io/air3/protocol/rewards-and-buyback.md).

# Rewards and Buyback

This page defines the profit split behavior used by AIRTrading after profit realization.

## High-level flow

When profit is realized (epoch settlement and/or eligible withdrawal profit logic):

1. apply protocol fee (if applicable to that path)
2. compute net profit
3. convert profit component to AIR3 (per protocol rule)
4. split net AIR3 allocation:
   * 50% buyback treasury
   * 50% users rewards

## Split rule

Net profit split:

* **50% Buyback**
* **50% Users**

This split should be documented as a protocol parameter if governance may update it in the future.

## User reward delivery model (recommended scalable approach)

To avoid iterating over all users on-chain, use an index-based claim model.

### Concepts

* `activeWeight` = total participating weight (excluding users who requested withdrawal)
* `rewardIndex` = cumulative reward per unit weight
* `userIndexLast` = last claimed index per user

### On epoch settlement

* `rewardIndex += usersPartAIR3 / activeWeight`

### On user claim

* `claimableAIR3 = userWeight * (rewardIndex - userIndexLast)`
* update `userIndexLast = rewardIndex`

This supports scale and keeps on-chain cost manageable.

## Withdrawal-specific positive PnL (if enabled)

For a withdrawal with positive realized PnL:

* capital/base amount can be returned in stable
* profit component can be converted to AIR3
* AIR3 split applies 50/50 buyback/users
* user receives only the users half of the profit component

This must be implemented consistently with epoch accounting to avoid duplication.

## Treasury roles (conceptual)

* **Buyback Treasury**: receives buyback-side AIR3 allocation
* **Rewards Pool**: receives user-side AIR3 allocation for claim

## Auditability requirements

Recommended emitted data on settlement:

* gross profit
* fee
* net profit
* buyback allocation
* users allocation
* conversion output (if swap performed)
* activeWeight used
* rewardIndex after update