Fees

Traders pay three fees: an opening fee when the position is created, a borrow fee that accrues continuously while it is open, and a closing fee when it is closed or liquidated. All fees go to the DLP and are distributed pro-rata to liquidity providers.

There is no funding rate as on a centralised perpetual exchange. Because the DLP is the counterparty rather than another trader, there is no rate that needs to balance longs against shorts — there is only a rate that compensates the pool for the inventory it has earmarked.

Opening and closing fees

Both are 0.1% of position size, deducted in the collateral asset.

For a $30,000 ETH long opened at $3,000/ETH with 1 ETH of collateral:

opening fee  = 0.001 × $30,000 = $30
            = 0.01 ETH at $3,000

remaining collateral after open  = 0.99 ETH

The fee is independent of leverage. A 1.1x position and a 50x position of the same notional size pay the same opening fee — the pool's exposure is the same.

Borrow fees

A borrow fee accrues every second a position is open, paid out of the collateral. It is the price of having the pool's inventory earmarked to back the position instead of free to back someone else's.

The rate is set per market and per side, and floats based on utilisation:

borrow_rate_per_hour = max_rate × (reserved / available)

where reserved is the pool inventory backing positions on that side, and available is the total pool inventory of that asset. When few positions are open, the rate is near zero; as positions saturate the pool, it climbs toward the per-market maximum.

Long and short sides are priced independently. If everyone is long ETH, longs pay a high rate and shorts pay almost nothing — because shorts are reserving stablecoin inventory that nobody else wants.

The accrual

Fees are computed against position size, not collateral:

fee_owed(t) = size × Σ rate(t_i) × Δt_i

The rate is updated whenever the utilisation changes (any open or close), and the accumulator is read whenever the position is touched. There is no per-position loop on every tick — the accumulator is a single cumulative number per market that each position checkpoints against.

Fees come out of the collateral, so they steadily increase your effective leverage. A position with low PnL that is held for weeks can be liquidated by fees alone.

Where the fees go

Every fee — opening, closing, borrow, and liquidation penalty — is credited to the DLP and increases the per-share value of the pool. Liquidity providers don't claim fees; the value of their DLP tokens rises as fees accumulate.

Worked example

A trader opens a $30,000 ETH long at $3,000 with 1 ETH of collateral (10x), holds for 7 days at an average borrow rate of 0.01% per hour, and closes at $3,150.

opening fee     = $30
borrow fee      = $30,000 × 0.0001 × 24 × 7    = $504
closing fee     = $31,500 × 0.001              = $31.50
pnl             = $30,000 × (3150 − 3000)/3000 = +$1,500

net to trader   = $3,000 + $1,500 − $30 − $504 − $31.50
                = $3,934.50

net to pool     = +$30 + $504 + $31.50 − $1,500 = −$934.50

The trader's collateral plus net PnL is paid out; the pool absorbs the loss but is partially compensated by the fees. Over many trades and many traders, the fee stream is the pool's edge.