Fees & Spread

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Introduction

In line with industry standards, fees are calculated on the value of the total position size (leverage x collateral).

1. Fees Breakdown
   1. Cryptocurrencies
   2. Degen
   3. Forex
   4. Commodities
   5. Revenue Distribution
2. Lifecycle of a Trade
   1. Opening Fee
   2. Spread
   3. Price Impact
   4. Borrowing Fees
   5. Dynamic Liquidation Prices
   6. Closing Fee

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Fees Breakdown

The “Market/Limit” fee below goes to the protocol fee distribution if the order is a market order, and to oracle bots if the order is a limit order. Additionally, the referrer rewards are always taken from the “Governance Fund” fees. Finally, while all trades are open, they may pay a borrowing fee, which goes into the overcollateral layer of the corresponding gToken vault. Gains Network earns revenue from trading fees on Gains. Fees are distributed as follows: • Governance (DAO): 76% for protocol operations and incentives
• Vault (Liquidity Providers): 15% for underwriting trades
• Referrals: 5%
• Trigger Keepers: 4% The share previously allocated to the GNS buyback & burn is, for now, directed to the Governance (DAO).

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Cryptocurrencies

For BTC and ETH, the spread is 0%. For other cryptocurrencies the spread is dynamic, depending on the price impact formula. Core

1. Opening a trade: 0.05%
2. Closing a trade: 0.05%

Non-core

1. Opening a trade: 0.06%
2. Closing a trade: 0.06%

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Degen

Degen pairs are high-leverage variants offering a fixed 500x leverage. The available degen pairs are:

• BTCDEGEN/USD
• ETHDEGEN/USD
• SOLDEGEN/USD
• BNBDEGEN/USD
• HYPEDEGEN/USD

1. Opening a trade: 0.02%
2. Closing a trade: 0.02%

SOLDEGEN/USD and HYPEDEGEN/USD have a fixed spread of 0.005%. All other degen pairs have a spread of 0%.

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Forex (Major)

Spreads on all major forex pairs are fixed at 0.01%.

1. Opening a trade: 0.012%
2. Closing a trade: 0.012%

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Forex (Minor)

Spreads on all minor pairs are fixed at 0.01%.

1. Opening a trade: 0.016%
2. Closing a trade: 0.016%

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Forex (Exotic)

Spreads on all exotic forex pairs are set per pair depending on their volatility.

1. Opening a trade: 0.02%
2. Closing a trade: 0.02%

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Commodities (Tier 1)

This category currently includes XAU/USD (Gold), XAG/USD (Silver), and HG/USD (Copper). Spreads on all tier 1 commodities are fixed at 0.01%.

1. Opening a trade (0.05%)
2. Closing a trade (0.05%)

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Commodities (Tier 2)

This category currently includes WTI/USD (Oil) and XPT/USD (Platinum). Spreads on all tier 2 commodities are fixed at 0.04%.

1. Opening a trade: 0.08%
2. Closing a trade: 0.08%

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Stocks

1. Opening a trade: 0.07%
2. Closing a trade: 0.07%

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Indices

1. Opening a trade: 0.05%
2. Closing a trade: 0.05%

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Lifecycle of a Trade

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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 * (0.06/100) = 1.5 USDC fee 248.5 USDC is the total collateral value of your newly opened trade, and therefore its total position size is 2,485 USDC.

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Fixed Spread

When opening a trade the Chainlink oracle returns a price for the asset. If the pair has a fixed spread, it is then applied to that price. For instance, with a 0.04% fixed spread on an oracle price of 3,003.19, the open price would be 3004.39 before consideration of the dynamic spread (see section below). That is: 3,003.19 + (3,003.19 * 0.04 / 100) = 3004.39 Note that some pairs, including BTC and ETH, have no fixed spread (0%), in which case only the dynamic spread applies. See the fees breakdown for per-class spreads. Spreads vary by pair. Smaller pairs with lower liquidity usually have a higher spread. The spread is displayed next to Price in the trade parameters and can be confirmed in the Pairs Storage contract by searching for the relevant pair index.

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Dynamic Spread

Dynamic spread, formerly known as price impact, is added on top of the fixed spread if the pair has one. It depends on the pair’s open interest, the size of the trade being opened, and the trade direction. Dynamic Spread (%) = (Open interest {long/short} + New trade position size / 2) / 1% depth {above/below}.

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Cryptocurrencies

Dynamic spreads use the 1% depth in each direction (long: 1% depth above / short: 1% depth below) from Binance. Forex Fixed spreads. Commodities Fixed spreads.

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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 USDC of open long interest: (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 So in this case if the median spot price was 3003.19, the opening price would be 3003.57.

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Borrowing Fee

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 and is calculated as follows: feePerBlock = baseFeePerBlock * (effectiveOi / maxOi) ^ exponent where effectiveOi is calculated as follows: effectiveOi = Math.min(Math.max(Math.abs(long - short), max * minP), max * maxP) effectiveOi is calculated by finding the delta between the side that is long and the side that is short. This value is then clamped using minP and maxP to create a floor and a ceiling, ensuring that both a minimum fee is always paid, and that the fee is never excessive. exponent is used to maintain an exponential relationship between the borrowing fee and the current market conditions. Although outdated, please refer to the Medium article for further details.

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Liquidation Prices

Trades liquidation prices can get closer over time if you pay borrowing fees. Liquidation Price Distance = Open Price * (Collateral * Liquidation Threshold - Closing Fee - 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 USDC collateral, the liquidation threshold would be 67%, the closing fee would be 16 USDC (20,000*(0.08/100) and that you have paid 1 USDC in borrowing fees: Liquidation Price = 20,000 - 20,000 * (50 * 0.67 - 16 - 1) / 50 / 100 = 19,888 USD.

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Liquidation Thresholds

The liquidation threshold depends on asset class and leverage used. The values can be found in the following table, for Cryptocurrencies, Forex (major), Forex (minor), Forex (exotic), Commodities (gold), Commodities (other)

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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 (our leveraged collateral), which is 24.85 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). 2485 * (0.06/100) = 1.988 USDC closing fee —> 24.85 - 1.988 = 22.862 USDC PnL Now let’s also say that the trade paid 0.5 USDC of borrowing fees: 22.862 - 0.5 = 22.362 USDC final PnL Therefore, you would receive 270.862 USDC (248.5 USDC collateral + 22.362 PnL) to your wallet after closing your trade.