# Economic Flow

**LEX** is both a utility and governance token. 

Currently, holders can participate in staking to receive 30% of the fees generated by the protocol in ETH.

In the future, when the protocol reaches a significant level of maturity, LEX will be used for decentralized governance. 

### Economic flow for Lexer

For an easier understanding on how the money flows in Lexer and how each party benefits: 

* Traders can deposit and trade freely in various markets using the [different liquidity engines](https://docs.lexer.markets/innovations-and-mechanism/hybrid-liquidity-engine) as directed by the Lexer [Smart Router](https://docs.lexer.markets/innovations-and-mechanism/smart-router).
* [Liquidity providers](https://docs.lexer.markets/trading/liquidity-provision) can choose which liquidity engine to provide for, keeping in mind that depending on their choice they will receive a different type of yield.
* 30% of the **total** trading fees goes to the staked LEX token holders (+ esLEX token holders).
* 70% of the total trading fees goes to liquidity providers in addition to profits from trader losses in the native tokens.

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