Fees & Spread 🪙 ​

1. ​Fees Breakdown

2. ​Lifecycle Of A Trade​

   1. ​Opening Fee​

   2. ​Fixed Spread​

   3. ​Dynamic Spread​

   4. ​Borrowing Fees​

   5. ​Liquidation Prices​

   6. ​Closing Fee​

Fees Breakdown ​

In line with industry standard, fees are calculated on the value of the total position size (leverage x collateral). It is also worth noting that spread and price impact are only relevant to opening a trade and not to closing.

On all pairs, the governance fees and the limit order/liquidation bot fees are directed to the $bHONEY vault.

Fixed Spreads for all pairs are always at 0.00%, and dynamic depending on the price impact formula on all other pairs.

Lifecycle Of A Trade ​

Opening Fee ​

Fees are applied to the leveraged amount.

Example ​

Fixed Spread ​

The spread is then taken into account (0.00%).

Example ​

Please make note that the spread is different for each pair - smaller pairs with lower liquidity have a higher spread. It is displayed on the front end next to the Price in the Trade Parameters box, and can be confirmed in the Pairs Storage contract by searching for the relevant pair index.

Dynamic Spread ​

Dynamic Spread, is added on top of the fixed spread (if the pair has one). It depends on the open interest of the pair, the position size of the trade being opened, and on the direction of the trade (long / short).

Dynamic Spread (%) = (Open interest {long/short} + New trade position size / 2) / 1% depth {above/below}.

ETH/USD Example ​

So using our above price example with a position size of 2,480 after fees, if the "1% depth above price" parameter for ETH/USD is 8m and there is 100,000 $HONEY of open long interest:

(100,000 + 2,480 / 2) / 8,000,000 = 0.0126% dynamic spread

(100,000 + 2,480 / 2) / 8,000,000 = 0.0126% dynamic spread

This percentage is then applied to the opening price including the Fixed Spread. In the case of crypto, as there is no Fixed Spread, this is just 3,003.19:

Final opening price =

3003.19 + (3003.19 \* 0.0126 / 100) = 3003.57

3003.19 + (3003.19 \* 0.0126 / 100) = 3003.57

So in this case if the median spot price was 3003.19, the opening price would be 3003.57.

Borrowing Fees ​

Borrowing fees treat open trades of the dominant side as vault borrowers. The fee is determined by a pair's (or the group the pair is part of) net OI relative to the overall vault TVL, meaning pairs (or groups) with more lopsided OI will charge more than pairs with balanced OI.

The fee is charged per block on a trade's total position size.

Liquidation Prices ​

Trades liquidation prices can get closer over time if you pay borrowing fees.

Liquidation Price Distance = Open Price * (Collateral * 0.9 - Borrowing Fees) / Collateral / Leverage.

Liquidation price = If Long: Open Price - Liquidation Price Distance Else (Short): Open Price + Liquidation Price Distance.

For example, let's say that you have opened a long on BTC/USD at 20,000 USD using 100x leverage and 50 $HONEY collateral, and that you have paid 1 $HONEY in borrowing fees:

Liquidation Price = 20,000 - 20,000 \* (50 \* 0.9 - 1) / 50 / 100 = 19,824 USD.

Liquidation Price = 20,000 - 20,000 \* (50 \* 0.9 - 1) / 50 / 100 = 19,824 USD.

Closing Fee ​

Let's say ETH/USD went up 1% from the open price, and we close the trade at 3,033.6. The pending profit (PnL) will be 1% of 2480.00 (our leveraged collateral), which is 24.8 $HONEY.

Now, we close the trade, and therefore pay the closing fee. Please note that the fees are always applied on the initial position size (without PnL).

2480 * (0.04/100) = 0.992 $HONEY closing fee
24.8 - 0.992 = 23.808 $HONEY PnL

2480 * (0.04/100) = 0.992 $HONEY closing fee
24.8 - 0.992 = 23.808 $HONEY PnL

Now let's also say that the trade paid 0.5 $HONEY of borrowing fees:

23.808 - 0.5 = 23.308 $HONEY final PnL

23.808 - 0.5 = 23.308 $HONEY final PnL

Therefore, you would receive 271.308 $HONEY (248 $HONEY collateral + 23.308 PnL) to your wallet after closing your trade.