How are Manifold fees allocated?

The fee amount (%) is initially set by the ambassador. From there, transaction fees collected from Manifold federations are split between the ambassador, the guardian hosts, and the PeerBadge verification service.

You can think of the fee being divided as follows: 4 shares for the ambassador, 1 share to pay for PeerBadge verification, and X shares based on X number of guardians securing the federation - 1 for each of them.

For example, if you as the ambassador choose a 10-guardian set, there would be 15 shares of the fee: 4 for you, 1 for PeerBadge, & 10 distributed to the guardian hosts (1 each). Setting the fee at 1% means 1,000 sats in fees collected on 100,000 sats transacted (100,000 x 1% = 1,000 sats).

1,000 sats divided into 15 shares means each share is 67 sats rounded to the closest whole number (1,000 / 15 = 66.67). The guardians receive 670 sats (67 x 10), 67 goes to PeerBadge verification, and you receive the 263 left over, which is ~ 4 shares of the total 15: (670 + 67 = 737... 1,000 - 737 = 263).