> For the complete documentation index, see [llms.txt](https://docs.mooncake.fi/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.mooncake.fi/core-mechanisms/fees.md).

# 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].

<figure><img src="/files/B1pzJp5FStlagcKNFw6W" alt=""><figcaption></figcaption></figure>

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)


---

# Agent Instructions
This documentation is published with GitBook. GitBook is the documentation platform designed so that both humans and AI agents can read, navigate, and reason over technical content effectively. Learn more at gitbook.com.

## Querying This Documentation
If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question.

Perform an HTTP GET request on the current page URL with the `ask` query parameter, and the optional `goal` query parameter:

```
GET https://docs.mooncake.fi/core-mechanisms/fees.md?ask=<question>&goal=<endgoal>
```

`ask` is the immediate question: it should be specific, self-contained, and written in natural language.
`goal` is optional and describes the broader end goal you are ultimately trying to accomplish on behalf of the user. GitBook uses it to tailor the answer towards what is most useful for that goal.

The response will contain a direct answer to the question and relevant excerpts and sources from the documentation.

Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.