Sequencer Fees & Liquidity Flywheel

The economic loop works like this: apps and protocols like VaultBridge, AUSD, and vKAT generate onchain activity—more transactions flowing through the network. Each transaction generates sequencer fees, which accumulate as chain-owned liquidity (CoL). This growing liquidity pool deepens market depth, which improves execution quality for traders. Better execution attracts larger volume and more users. And then the cycle repeats.

It's a self-reinforcing machine. Activity feeds fees, fees build liquidity infrastructure, stronger liquidity brings more activity. Every participant in the ecosystem benefits as the network effect compounds—tighter spreads, faster settlement, lower slippage. The more the network grows, the more efficient it becomes.