Fees
The Dexodus protocol is designed to offer traders a cost-efficient and seamless experience by eliminating gas fees while maintaining a fair and transparent fee structure for perpetual trading. This section explains how fees work within Dexodus, their types, and their distribution.
1. Gasless Trading
Dexodus eliminates gas fees for traders by leveraging account abstraction through the Dexodus Account system. This means traders can execute trades without needing to hold ETH for gas, providing a smooth and cost-efficient user experience. Gas fees incurred by the protocol are covered by Dexodus, enabling gasless and frictionless trading for all users.
2. Trading Fees
Trading fees are applied to all trades executed on the platform and are divided into maker and taker fees, based on the type of order placed:
Maker and Taker Fees
Maker Fees: Applied to traders who place limit orders that add liquidity to the order book.
Typical Fee: 0.01% of the trade value.
Taker Fees: Applied to traders who execute market orders that remove liquidity from the order book.
Typical Fee: 0.035% of the trade value.
Market-Specific Adjustments: Maker and taker fees may vary depending on the market, offering flexibility to align with trading activity and market demand.
Fee Distribution
Fees generated from trading activity are distributed as follows:
75% to Liquidity Providers:
As a reward for providing liquidity, 75% of all trading fees are allocated to LPs in the weighted liquidity pool.
25% to the Dexodus Treasury:
The remaining portion is directed to the protocol treasury to support ongoing development, operations, and incentives.
3. Funding Fees
Funding fees are an essential mechanism in perpetual trading, designed to align the perpetual market price with the index price by encouraging balance between long and short positions.
How Funding Fees Work
Paid Periodically: Traders holding positions (long or short) pay or receive funding fees based on the open interest imbalance between the two sides.
Counterparty Alignment: Funding fees ensure that if one side of the market is overrepresented, traders on that side pay fees to the other side, encouraging a balanced market.
Fee Distribution
Funding fees are distributed as follows:
80% to Counterparty Traders:
Most of the funding fees are directly paid to traders holding positions on the opposite side of the market, encouraging fair PnL outcomes.
20% to Liquidity Providers:
A smaller portion is allocated to LPs, rewarding them for supporting the market's liquidity needs.
Why This Fee Structure?
Trader Benefits:
By covering gas fees, Dexodus ensures a streamlined trading experience with no hidden costs.
Fair maker and taker fees incentivize both active trading and liquidity contribution.
Liquidity Provider Incentives:
LPs are rewarded with a significant share of trading and funding fees, encouraging long-term participation in the liquidity pool.
Market Stability:
Funding fees create a self-correcting mechanism to maintain market balance, reducing risks of open interest imbalances.
Protocol Sustainability:
The treasury’s share of trading fees ensures the protocol remains well-funded for ongoing development and growth.
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