🎰Fees & Others

Protocol Fees

Leverage Trading Fee

Please see UI for the actual fee charged on open/close a position for both PHAME v1 and v2.

The collateral of long positions is the token being longed, for PLS longs the collateral is PLS and for eHEX longs the collateral is eHEX, etc.

The collateral of shorts positions is any of the supported stablecoins e.g. wUSDC, wUSDT, wDAI, etc.

Execution Fee

There are two transactions involved in opening / closing / editing a position:

• User sends the first transaction to request open / close / deposit collateral / withdraw collateral

• Keepers observe the blockchain for these requests then execute them

The cost of the second transaction is displayed in the confirmation box as the "Execution Fee". This network cost is paid to the blockchain network.

Borrowing Fee

There is a "Borrow Fee" that is deducted on an hourly basis. This fee represents the payment made to the counterparty of your trade. The exact fee per hour varies depending on the utilization and is calculated as (borrowed assets) / (total assets in the pool) * 0.01%^. The "Borrow Fee" for both long and short positions is displayed below the swap box.

^ Examply only. Please see UI for the actual borrow fee schedule.

Slippage

While there are no price impacts for trades, there can be slippage due to price movements between when your trade transaction is submitted and when it is confirmed on the blockchain. Slippage is the difference between the expected price of the trade and the execution price, this can be customised in the "Settings" menu by clicking on the "..." icon at the top right of the page.

Additionally, all other fees will be transparently shown before a user executes a trade.

PHLP Fees

The fees for minting PHLP, burning PHLP, and performing swaps depend on whether the action increases or decreases the balance of assets in the index. If the index has a higher percentage of HEX and a lower percentage of USDC, actions that further increase the HEX amount will have higher fees, while actions that reduce the HEX amount will have lower fees.

You can view the token weights on the Dashboard. These weights are adjusted to hedge PHLP holders based on the positions taken by traders. If many traders are long on HEX, the token weight for HEX will be higher. Similarly, if many traders are short, stablecoins will have a higher token weight.

When token prices rise, the price of PHLP will also increase, regardless of the traders' long positions. The portion reserved for long positions can be considered stable in terms of its USD value. If prices increase, the profits from that portion will be used to pay traders, and if prices decrease, the losses from traders will maintain the USD value of the reserve portion.

If many traders are shorting and stablecoins have higher weights, PHLP holders will have synthetic exposure to the tokens being shorted. For example, if HEX is being shorted, the price of PHLP will decrease if the price of PLS decreases. Conversely, if the price of PLS increases, the price of PHLP will increase due to losses from the short positions.