This page explains the execution fee model and minority-side rebate mechanism in trading terms, then translates them into practical considerations for most participants.
For position-level fee and rebate detail from the API, on-chain parameters, and integration-oriented notes aimed at liquidity providers and integrators, see Market makers / LPs.
Trade fee mechanics
Every position change incurs a fee of 4.5 bps (0.045%) on the change in notional.
| Action | Change in Notional | Fee |
|---|
Open $100 position | $100 | $0.045 |
Increase $100 -> $250 | $150 | $0.0675 |
Reduce $100 -> $40 | $60 | $0.027 |
Close $100 position | $100 | $0.045 |
When fees are charged
- Open / increase: Fee is deducted when the order is placed.
- Reduce / close: Fee is charged when the order is matched and filled.
If an open/increase order is canceled before fill, the pre-deducted fee is reimbursed.
Open/increase sizing impact
For open/increase orders, fee is taken from deposited margin before exposure is finalized.
That means realized notional is slightly below margin * leverage.
This matters for high-precision sizing and liquidation-distance planning at higher leverage.
Where fees go
Per matching cycle, total collected fees are allocated to:
- Minority-side rebates
- Insurance Fund
- Protocol fees
The split is governed by three parameters:
| Parameter | Meaning |
|---|
| Imbalance entitlement (E) | Share of total fees allocated to minority side; scales with imbalance, up to cap |
| Max entitlement (E_max) | Cap on minority-side entitlement |
| Insurance fund entitlement (E_I) | Share of post-rebate remainder allocated to Insurance Fund |
F:
- Minority rebates:
E * F
- Insurance fund:
E_I * (1 - E) * F
- Protocol:
(1 - E_I) * (1 - E) * F
When executable long/short notional is balanced, imbalance is zero, so E = 0 and no minority rebate is generated for that matching cycle.
Executable notional (for imbalance)
Executable notional is the sum of notional across orders that are executable under oracle threshold rules: for opening long and closing short, the threshold must be ≥ oracle; for opening short and closing long, the threshold must be ≤ oracle. The imbalance used in rebate math comes from the matching plan: L = openingLong + closingShort, S = openingShort + closingLong, and I = |L − S|.
Liquidation reduce flow can change closing-side totals and therefore imbalance and fee routing; see liquidation and the market makers / LPs page for more detail.
Rebates
Instead of continuous funding payments, rebates are paid to the side with lower executable notional (the minority side).
- If you are on minority side, you can earn rebates.
- If you are on majority side, you pay standard fee and earn no rebate.
- You never pay an additional “negative rebate” charge beyond standard trade fees.
This creates a flow incentive toward book balance without adding periodic holding costs.
Rebate accounting and payout
Protocol tracks cumulative rebate meters (one for long, one for short).
- On position open, your side’s current meter is snapshotted.
- Rebate accrues as
(current meter - snapshot) * position size.
- Rebate is realized on reduce/close (full or proportional on partial close).
Position lifecycle behavior
| Event | Rebate treatment |
|---|
| Open | Start accruing from your snapshot forward |
| Increase | Existing accrual preserved; snapshot effectively blended for added size |
| Partial close | Realize accrued rebate on closed portion only |
| Full close | Realize all accrued rebate |
