# How Drops Generates Revenue

[**Learn about DROPS**](../drops-token/drops-token-economics) **(Erc20 Token)**

> **The** [**DROPS**](../drops-token/drops-token-economics) **Token is the core component of the Drops Marketplace and ecosystem.** It is the primary currency used within the platform to buy, sell and trade liquidity. It also allows for earnings to occur via multiple outlets.

### How does the Drops Marketplace generate earnings?

* **Token Trading Fees:**

DROPS Token is the primary currency used within the Drops Liquidity Marketplace. Seeing as liquidity sales occur mainly in DROPS for this reason, its purchase and sale is a virtual necessity for anyone wishing to buy, sell or trade locked liquidity.&#x20;

A 5% trading fee is collected on all buy & sell transactions occurring on the DROPS Token. 20% of this fee (i.e. 1% of the total value of each buy & sell transaction) is considered as “platform earnings”, and is distributed as such to pool contributors in accordance with the Distribution of Earnings section of this documentation.

* **ETH Brokerage Fees:**

Each time liquidity is sold in ETH through the Drops Marketplace, a 10% brokerage fee is collected by the platform. This fee is taken directly from the amount paid to the seller. Please note that this fee is subject to change. Please note also that this fee only applies to sales completed using ETH; Sales occurring in DROPS are not subject to brokerage fees.
