Fees and funding
What fees does a user pay when opening a trade?
PositionOpenFee = BlockchainGasFee + ProtocolFee
What fees are incurred to an already opened position? Only FundingFee
What fees does a user pay when closing a trade?
PositionCloseFee = BlockchainGasFee + FlashloanFee
FlashFlow Protocol fees
FlashFlow charges a certain amount of commission from every opened position. This amount is fixed at 0.16%, i.e. 0.08% for opening a position and 0.08% for closing a position.
The whole amount of the protocol fee is included in a position, when opening a trade and is being calculated based on the Position Size.
The protocol fee is calculated as follows:
E.g., if we open a position using 100 USDT as margin with x2 Leverage, our Position Size would equal:
Consequently, the amount of the protocol fee would be:
Funding fee
A funding fee is a cost that traders pay for holding a leveraged position open for a certain period of time.
Upon initiating a deal, you may select a fixed or variable interest rate:
Typically, fixed rates exceed variable rates, offering protection against sudden fluctuations. As an example, during USDC depeg, where the floating rate peaked at over 100% before reverting to the standard 3-4% level.
The rates represented in the Order Placement Module are reflected as yearly percent rate and will be charged based on the position size of the Order. In other words, when using Stable funding rate with 11.07% rate and if a position will remain open for a year, a total amount of funding incurred to a position would equal 11.07% of its total size.
The funding amount is deducted from your transaction with every generated block. It is also worth noting that this directly impacts the liquidation price. We kindly request that you consider this factor when initiating a deal.
Blockchain commission (Gas)
It is also important to keep in mind that due to the nature of DeFi, every time you'd want to open a position on the market, a certain actions has to be performed on the blockchain via means of transactions.
As per usual, every interaction performed on the blockchain would require a certain amount of commissions to be paid to that blockchain in order to cover the expenses for carrying out the transaction.
Gas must be paid in native tokens (ETH for Ethereum blockchain, BNB for Binance Smart Chain, and so on).
This amount is reflected as 'Gas', when using Ethereum blockchain and will be displayed in the 'Order Placement Module':
The amount of blockchain commissions would be deducted immediately upon opening a position on the market from the user's Wallet balance. Thus, we highly recommend to pay attention to the current blockchain activity, as well as manage the amount of Gas you wish to include in your transaction prior to opening a position on the Market.
More information on how to change and manage the blockchain commissions parameters you may find in the topic 'How to open and close a trade'.
Flashloan fees
Flashloan fees are directly related to the collateral chosen and to the protocol that FlashFlow interacts with at the moment of order execution (essentially, the one that provides the lowest commission rate for a given collateral at the moment).
Flashloan commisison is a certain amount of funds that're paid to the lending protocol which provides the ability to utilize flashloans.
Currently, the protocols that FlashFlow interacts with in order to utilize flashloans are:
AAVE
Maker
Balancer
The commissions rates are being calculated once the order parameters are set, is directly related to the amount of margin and leverage used, and the protocl used. FlashFlow mechanics are set in a way that the protocol with the least fee rates is being utilized at the moment of order execution.
It is also important to note, that these fees would not affect the user's Wallet balance and are directly included into the PnL calculation of the position.
Swap Fees
FlashFlow doesn't pose any additional fees for using Swap function directly via our protocol.
However, it is important to remember that as such swaps would be provided via means of blockchain transactions, the amount of fees may vary depending on the current rates of blockchain fees. These fees would be deducted from the trader's Wallet balance once the Swap transaction is complete.
For the sake of convenience of our users we've implemented an additional indicator, reflecting the amount of fees that would be charged when commiting Swaps between different tokens:
It is also important to remember that even the swap transactions are a subject to slippage.
For more information on slippage and how to set this parameter, please see the following article: Important indicators and settings to consider
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