Fees

Fee Structure

  • LT Swap Fee: A transaction fee charged on each Leveraged Token (LT) trade, based on the trade amount.

  • FT Swap Fee: A transaction fee charged on each Funding Token (FT) trade, based on the trade amount.

  • LP Mint/Redeem Fee: 0% / 0.5%.

  • Market Management Fee: 2% annualized rate, applied to the overall market to cover system operations and maintenance.

  • Rebalance Fee: A proportional fee charged per rebalance event, applied to all participants involved.

  • LP Imbalance Fee: When LT buy/sell activities cause significant deviation between the leveraged and funding positions within the LP pool, an LP Imbalance Fee of up to 2% will be charged to mitigate excessive pool imbalance and protect overall stability.

Imbalance Fee is calculated based on the following mechanism:

Indicator: the proportion of leveraged position in the LP pool

pool_lev_ratio = pool_leverage / (pool_leverage + pool_funding)

  • Before the trade: pre_pool_lev_ratio

  • After the trade: post_pool_lev_ratio

The value of this ratio ranges from [0, 1].

Parameters:

  • max_imbalance: The maximum fee level, represented by M in the formula, set at 2%.

  • p: Determines the steepness of the curve, set to 5.

  • b: The baseline proportion of leverage positions in the underlying, calculated as

    unit_leverage_amount / (unit_leverage_amount + unit_funding_amount)

Imbalance Fee Calculation:

pre_imbalance = f(pre_pool_lev_ratio) post_imbalance = f(post_pool_lev_ratio) Imbalance Fee = max(post_imbalance - pre_imbalance, 0)

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