✨Protocol Fees
As you all know, the use of financial leverage, margin, and trading all incur certain costs We are sure that many investors have quite a headache with the costs of financial leverage, there are many traders who see profit orders, but when liquidating orders, they do not receive the amount of profit as calculated because they have been minus platform costs We have also consulted and aggregated a lot of fee levels and we will publish a specific fee calculation method for users to be able to balance. Note: This is the most attractive cost in the market that we set up
Fees Breakdown
The fee will be split 50/50 to Treasury & Swiftswap funds
The "Ecosystem" fee is split between Swiftswap Single-Sided Staking and the mUSDC vault
The "Market/Limit" fee goes to Swiftswap staking if the order is a market order, and to NFT bots if the order is a limit order.
Rollover fee is paid while trades are open
The funding fee is paid or earned depending on the trade position.
Cryptocurrencies
Spreads on BTC/USD and ETH/USD are fixed at 0.04%, and dynamic depending on the price impact formula on all other pairs.
Opening a trade: 0.08%
0.06% -> Treasury & Governance
0.015-0.02% -> Referrer
0.02% -> Market/Limit
Updating a stop loss (guaranteed execution): 0.015% -> Treasury & Governance
Closing a trade: 0.08%
0.06% -> Ecosystem
0.02% -> Market/Limit
Forex (Major)
Spreads on all major forex pairs are fixed at 0.01%.
Opening a trade: 0.008%
0.006% -> Treasury & Governance
0.0015-0.002% -> Referrer
0.002% -> Market/Limit
Closing a trade: 0.008%
0.006% -> Ecosystem
0.002% -> Market/Limit
Fees generate from the Protocol
Opening Fee
Let's say we use 250 USDC at 10x leverage to long ETH/USD. The fee is applied to leveraged amount: 2,500 USDC.
2,500 USDC* (0.08/100) = 2 USDC fee
248 USDC is the total collateral value of your newly opened trade, and therefore its total position size is 2,480 USDC.
Spread Discount (coming soon)
In order to reduce the fee, you can use a Swiftswap NFT. The percentage of the reduction can be found in their website.
When opening a trade, the price of the asset is provided by a Chainlink oracle. The spread, which is a small percentage of the open price, will also be taken into account. For example, if the open price of the asset is 3,003.19, the spread of 0.04% will be added resulting in an open price of 3004.39.
By using an NFT, you can reduce the spread by a certain percentage, for example, using a Diamond NFT can reduce the spread by 35%. In this example, the open price would be 3003.97. It is particularly beneficial to use an NFT when using high leverage.
Dynamic Spread
Dynamic Spread is an additional fee that is based on the current market activity and the size of the trade being opened. It is calculated using the following formula:
Dynamic Spread (%) = (Open interest (long or short) + New trade position size / 2) / 1% of total market depth (above or below the current price)
For example, if there is a lot of open interest in a particular trade and the trade being opened is large, the dynamic spread will be higher. Similarly, if the trade is going in the opposite direction of the current market trend, the dynamic spread will also be higher. It is important to keep this in mind when placing trades, as it can have an impact on the final price and potential profit or loss.
Cryptocurrencies
Dynamic spreads using 2x the 1% depth in each direction (long: 1% depth above / short: 1% depth below) from Binance, apart from BTC/USD and ETH/USD which use fixed spreads.
Forex
Fixed spreads apart from:
Major news: 1% depth is set to 250k on relevant pairs - for instance during a CPI release.
Low liquidity session: 1% depth is set to 10m on all pairs for 2 hours after New York close.
Market closing: 1% depth is set to 250k on all pairs 30 minutes before the market closes
Rollover & Funding Fees
Rollover and funding fees are applied to trades while they are open.
Funding Fee
The Funding Fee serves to increase the value of a position on the less heavily exposed side of the market, whereby a trader who holds a short position while most others are long will receive a payment, while holding a long position while most others are also long will result in a cost to the trader. The Funding Fee is subject to change based on the opening and closing of positions, and may shift from a positive to a negative value during the lifespan of a trade.
Upon opening a position, the Funding Fee begins to accrue, based on the amount borrowed from the vault and the current funding rate, which resets every 8 hours and is dependent on the Open Interest (OI) of Longs and Shorts. The longer a position is held open, the greater the Funding Fee becomes, which is paid out upon the position's closure.
For instance, if a trader opens a $20,000 BTC Long position with 10x leverage, borrowing $18,000, and then closes the position completely 16 hours later, or two Funding Periods, assuming the rate (0.025%) remains constant during this period, the total Funding Fee would be calculated as follows:
Funding fee = 18,000 * 0.00025 * 2 = $9
Funding rate
To promote risk management measures for the protocol, a funding rate R is implemented for each asset on both sides to encourage traders to maintain their total position size in line with their collateral. The funding rate is calculated dynamically and updated for each asset at regular intervals (1 hour). The calculation of the funding rate is as follows:
The parameter k, which is a function of the historical volatility of each asset, is regularly updated to reflect changes in market conditions.
The funding fees, denoted by Ff, are disbursed upon the closure of a position. These fees are determined by the size of one's position, P, at the start of each funding interval and the length of time the position has been held, t, rounded up to the nearest hour.
Rollover Fee
The Rollover fee is charged each block and is only applied to the collateral. It helps allowing low leverage on the platform with appropriate risk management.
For example, looking at the image above, the rollover fee on TRX/USD at the time of the screenshot was 0.0082% per hour. This means if you had a 10x long open, you'd pay 0.00082% on your position size, and earn 0.0481% on your position size from funding fees (net positive of 0.04728% per hour).
Liquidation Prices
Trades liquidation prices can get closer over time if you pay funding / rollover fees or go further away if you earn from funding fees.
Liquidation Price Distance = Open Price * (Collateral * 0.9 - Rollover Fees - Funding 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 USDC collateral, and that you have earned 1 USDC in funding fees and paid 0.5 USDC in rollover fees:
Liquidation Price = 20,000 - 20,000 * (50 * 0.9 - 0.5 - (-1)) / 50 / 100 = 19,818 USD.
Closing Fee
Let's say ETH/USD went up 1% from the open price, and we close the trade at 3,033.22. The pending profit (PnL) will be 10% of 2480 (our leveraged collateral), which is 248 USDC.
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 * (0.08/100) = 1.984 USDC closing fee
--> 24.8 - 1.984 = 22.816 USDC PnL
Now let's also say that the trade earned 1.2 USDC from funding, and paid 0.5 USDC of rollover fees:
22.816 + 1.2 - 0.5 = 23.516 USDC final PnL
Therefore, you would receive 271.516 USDC (248 USDC collateral + 23.516 PnL) to your wallet after closing your trade.
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