diff --git a/docs/ARCHITECTURE.md b/docs/ARCHITECTURE.md
index 8ee6bc5..dd4b178 100644
--- a/docs/ARCHITECTURE.md
+++ b/docs/ARCHITECTURE.md
@@ -17,7 +17,7 @@ Kraiken.sol (ERC-20 token)
 │       ├── Staking positions with tax rates
 │       ├── Snatch mechanics (competitive staking)
 │       └── getPercentageStaked(), getAverageTaxRate()
-└── feeDestination: address (protocol revenue — fees go HERE, not back to holders)
+└── feeDestination: address (protocol revenue — both WETH and KRK fees go HERE, not back to holders)
 
 Optimizer.sol (UUPS Upgradeable Proxy)
 ├── Reads: stake.getPercentageStaked(), stake.getAverageTaxRate()
@@ -33,6 +33,9 @@ Optimizer.sol (UUPS Upgradeable Proxy)
 - **LiquidityManager → Kraiken**: exclusive minting/burning rights
 - **Optimizer → Stake**: reads sentiment data (% staked, avg tax rate)
 - **Optimizer upgrades**: UUPS proxy, admin-only `_authorizeUpgrade()`
+- **feeDestination receives both WETH and KRK fees**: during `recenter()`, Uniswap V3 fee collection produces both tokens. WETH fees AND KRK fees are forwarded to `feeDestination` (see `LiquidityManager._scrapePositions()`).
+- **feeDestination KRK excluded from outstanding supply**: `_getOutstandingSupply()` subtracts `kraiken.balanceOf(feeDestination)` before computing scarcity, because protocol-held KRK cannot be sold into the floor and should not inflate the supply count.
+- **Staking pool KRK excluded from outstanding supply**: `_getOutstandingSupply()` also subtracts `kraiken.balanceOf(stakingPoolAddr)`, because staked KRK is locked and similarly cannot be sold into the floor.
 
 ## Three-Position Strategy
 
diff --git a/docs/PRODUCT-TRUTH.md b/docs/PRODUCT-TRUTH.md
index a6fb8be..8476991 100644
--- a/docs/PRODUCT-TRUTH.md
+++ b/docs/PRODUCT-TRUTH.md
@@ -59,6 +59,9 @@ when the protocol changes — not the marketing copy.
 - Trading fees are collected by the LiquidityManager during recenters
 - Fees are sent to `feeDestination` (protocol treasury / founders)
 - Fee revenue is the protocol's business model
+- **Both WETH and KRK fees** from Uniswap V3 positions are forwarded to `feeDestination` — not just ETH/WETH
+- KRK held at `feeDestination` is excluded from the outstanding supply calculation, because protocol-held KRK cannot be sold into the floor and should not inflate the scarcity metric
+- KRK held in the staking pool is also excluded from the outstanding supply calculation for the same reason — staked KRK is locked and cannot be sold into the floor
 
 ❌ **Cannot say:**
 - "Fees grow your KRK value" — **FALSE.** Fees go to treasury, not back to holders.