> For the complete documentation index, see [llms.txt](https://docs.resolv.xyz/litepaper/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.resolv.xyz/litepaper/protocol-mechanics/profit-distribution/calculation-example.md). # Calculation Example Reward distribution mechanism allows both stUSR and RLP benefit from collateral pool income. Losses are attributed to RLP. For the calculation example, suppose $100,000 were deposited into the protocol, with $70,000 into USR and $30,000 into RLP. #### Example 1. Reward epoch profit Over the course of a reward epoch, collateral pool realizes $20,000 profit. In this example, both stUSR and RLP share a portion of increase in TVL. * Base Reward is calculated as $20,000 \* 90% \* 85% = $15,300 and allocated to stUSR and RLP proportionately to their TVL; * Risk Premium is calculated as $20,000 \* 90% \* 15% = $2,700 and allocated to RLP. * Protocol takes fees as $20,000 \* 10% = $2,000. The table below shows the calculation of how the profit is attributed.

	Amount	stUSR Portion	RLP Portion
Base Reward	[$20,000 * 90%] * 85% = $15,300	$10,710	$4,590
Risk Premium	[$20,000 * 90%] * 15% = $2,700	$0	$2,700
Protocol Fees	$20,000 * 10% = $2,000	-	-
Total	$20,000	$10,710	$7,290

Example 1. Reward epoch with a $20,000 profit.

#### Example 2. Reward epoch loss Over the course of a reward epoch, collateral pool realizes $20,000 loss. In this example: * Full amount of loss is allocated to RLP. Its value decreased by $20,000; * No distributions are made to stUSR. * No protocol fees are taken because the collateral pool realizes a loss.