# Points

> Points reward the activity that makes Spout work: collateral that earns premium, and USDC that funds loans.

Canonical: https://spout.finance/docs/points/

---

Points reward the activity that makes Spout work: collateral that earns premium, and USDC that funds loans. Points are earned from real protocol fees, not from simply holding a balance.

## How points are created

- Each time a contract settles, it produces a protocol fee.
- Every $1 of that fee creates 100 points.

- 58% of those points go to the collateral side (borrowers) and 42% to the capital side (lenders).
- Within each side, points are shared by how much you had in and for how long, measured hourly over the contract's life.

- Your share is multiplied by your loyalty multiplier.

## Loyalty multiplier

| Time your funds have been in | Multiplier |
| --- | --- |
| Day 1 to 30 | **1.00**x |
| Day 31 to 90 | **1.25**x |
| Day 91 onward | **1.50**x |

Each deposit ages on its own. When you withdraw, your newest deposits are taken out first, so your oldest keep their multiplier.

## An example

In one week, settled contracts produce $6,000 of protocol fees, which creates 600,000 points:

- 348,000 go to the collateral side. If your collateral was 1% of that side's dollar hours (dollars held multiplied by hours held), you get 3,480 points, times your multiplier.
- 252,000 go to the capital side. If your lending was 2% of that side's dollar hours, you get 5,040 points, times your multiplier.

## Rules

- **One person, one balance.** All wallets linked to your account earn into one balance.
- **Lending against your own loan does not count.** If you borrow and lend at the same time, your lending is reduced by your own loan before capital side points are calculated.

- **Points never affect your LTV** or your borrowing limit.
- **Testnet activity does not earn points.**

## Using points

- Points become usable 7 days after you earn them.
- 1,000 points = $1, credited to your lending balance as Senior or Junior shares. The minimum redemption is 5,000 points.

- Points expire after 24 months, or after 12 months without earning any.

The full terms of the points program are in the app.