> For the complete documentation index, see [llms.txt](https://arvo.gitbook.io/arvo/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://arvo.gitbook.io/arvo/8.-treasury-model.md).

# 8. Treasury Model

The Treasury is the central capital pool of Arvo.

Operating businesses remain independent legal entities and continue to manage their own day-to-day operations. Before any profits are contributed to the Treasury, each business retains sufficient capital to meet operating expenses, taxation, working capital requirements and future growth.

Following these requirements, **50% of distributable profits** are contributed to the Arvo Treasury, with the remaining 50% retained within the operating business to support continued growth and operational resilience.

The Treasury allocates capital in accordance with the protocol's investment framework and governance framework. Its primary objective is to expand the portfolio of operating businesses while maintaining a financially resilient Treasury capable of supporting the wider ecosystem.

Treasury capital is deployed towards:

* Business investment.
* Treasury reserves.
* Treasury-backed stablecoin staking rewards.
* Token buyback programmes.
* Protocol development.
* Strategic initiatives.
* Liquidity, where required.

Subject to available Treasury resources and the protocol's investment priorities, governance may approve periodic token buyback programmes. The timing, scale and implementation of any buybacks will take into account Treasury requirements, investment opportunities, market conditions and the long-term objectives of the protocol. Tokens acquired through buyback programmes may be retained by the Treasury, utilised within the protocol or otherwise managed in accordance with future governance decisions.

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<figure><img src="/files/ek1FXLDYu0TP4b3KpmvE" alt=""><figcaption></figcaption></figure>

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The example below illustrates how Treasury capital may be allocated following a contribution from an operating business.

#### Illustrative Example

| Business Profit Distribution         | Amount         |
| ------------------------------------ | -------------- |
| Distributable profit                 | **£1,200,000** |
| Retained by operating business (50%) | **£600,000**   |
| Contributed to Arvo Treasury (50%)   | **£600,000**   |

#### Illustrative Treasury Allocation

<table data-search="false"><thead><tr><th>Treasury Use</th><th>Example</th></tr></thead><tbody><tr><td>Business investment</td><td><strong>£240,000</strong></td></tr><tr><td>Treasury reserve</td><td><strong>£120,000</strong></td></tr><tr><td>Stablecoin staking reward pool</td><td><strong>£90,000</strong></td></tr><tr><td>Token buybacks</td><td><strong>£60,000</strong></td></tr><tr><td>Protocol development</td><td><strong>£60,000</strong></td></tr><tr><td>Strategic initiatives</td><td><strong>£30,000</strong></td></tr><tr><td><strong>Total</strong></td><td><strong>£600,000</strong></td></tr></tbody></table>

{% hint style="info" %} <sub>*The figures above are provided for illustrative purposes only and do not represent fixed allocation percentages. Treasury allocations are determined through the protocol's governance framework, taking into account investment opportunities, Treasury resources, market conditions and the long-term objectives of the protocol.*</sub>
{% endhint %}

As the portfolio of operating businesses grows, recurring Treasury contributions are expected to increase, providing additional capital to support further business investment, strengthen the Treasury and expand the wider Arvo ecosystem.