Fees
Takers pay ~1.1% to open a position. This goes to makers, insurance, and the market creator. Values below are the live on-chain parameters of the deployed Fees module on Arbitrum One.
| Fees | Current | Range | Description |
|---|---|---|---|
| Position Opening | 1.11% | ||
| LP | 1% | 0-5% | Distributed to makers servicing active liquidity |
| Creator | 0.01% | 0-5% | Paid to market creator |
| Insurance | 0.1% | 0-5% | Replenishes market insurance fund |
| Protocol | 0% | 0-1% | Protocol revenue share (currently off) |
| Ongoing | |||
| Utilization | Var. | 0-5% | Paid by takers to makers based on utilization |
| Liquidation | 1% | 0-50% | Paid to liquidators |
Details
Fees are charged when you open a taker position, as a percentage of notional value.
1. LP Fee
The main trading fee. Goes to makers providing liquidity in active price ranges. Live markets currently charge a flat 1%. A dynamic LP fee that adjusts with liquidity depth and volatility is the planned production module; its design is below.
2. Creator Fee
A fee paid to the market creator. Currently set to 0.01%; all live markets are created by Strobe Labs.
3. Insurance Fee
Replenishes the market's insurance fund, which covers bad debt if liquidations fail. See Insurance Model.
4. Utilization Fee
Paid continuously by takers to makers, based on how much of the available liquidity is being used. When utilization is low, the fee is low. When utilization is high, the fee increases to attract more makers.
Liquidation Fee
1% of notional, paid to the liquidator. See Liquidations & ADL.