Fees

Transaction Fees

Root DEX currently sets the transaction fee for both opening and closing positions at 0.08%. The future fee structure will be decided by the Root DEX community.

$$Transaction Fee = Transaction Value x 0.08$$

60% of the platform's transaction fees are allocated to RLP (Root Liquidity Providers) holders who contribute liquidity to the pools, 30% to Root DEX token holders who stake their tokens, and the remaining 10% is used for the buyback and burning of Root DEX tokens.

Borrowing Fees

Upon opening a position, a trader is required to pay borrowing fees to the liquidity providers.

$$Borrowing Fee = Position Value x Pool Usage Rate x 0.008$$

For example, if Bob uses 100 USDC as a margin to open a long position with 10x leverage and the pool usage rate is 10%, after 2 hours, Bob would need to pay 1000 x 0.1 x 0.008% x 2 = 0.016 USDC as a borrowing fee to the liquidity providers.

Funding Fees

Root DEX implements a funding fee mechanism to balance the aggregated long and short positions. The funding fee is settled between traders and the funding pools. The funding fee is not settled every 8 hours, but previous funding fees are settled every time a transaction occurs. When the aggregated long position > short position in a given market, the funding fee is positive, and longs pay shorts. When the aggregated long position < short position in a given market, the funding fee is negative, and shorts pay longs. The funding fees on Root DEX are calculated on the blockchain every second, and the 8-hour estimated funding fee displayed on the trading page is based on real-time funding fees.

Execution Fees

Opening, closing, and editing a position involve two steps: First, the user sends a transaction request to the blockchain, including parameters such as margin amount and leverage. Then, Keepers monitor the blockchain for the request, obtain the price feed from the oracles, and execute the request. The transaction is considered complete once the second step is done. As a result, every transaction request sent to the blockchain requires an additional execution fee, which is paid to the blockchain network. Currently, the execution fee on the Arbitrum blockchain is 0.0003 ETH per instance.

Fees on Selling RLPs

No fee is charged when purchasing RLPs. However, when selling RLPs, a handling fee of 0.1% is applied.