# 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].

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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)