Fees
🚨 Note: To obtain the current fee rate, call feeRate on the FeeCollector smart contract. The fee rate when this document was written was 0.3%. Hence, a 0.3% fee rate is used throughout this document for simplicity. This fee will not change often, and any changes must undergo governance voting.
How much do I have to pay in fees?
Users only pay fees when increasing their position or when adding leverage to their position.
When increasing a position, the maximum fee that users will pay is 0.3% of the collateral amount supplied in that transaction.
When adding leverage to a position, the maximum fee that users will pay is 0.3% of the amount borrowed in that transaction.
Users interacting with the Pesto protocol through a client may get discounts, as client operators earn a share of the protocol fees and may offer incentives by forgoing some of their earnings in favor of their users.
Example: If the current client rate is 30%, this means that a client can earn 30% of the maximum fee. However, a client can opt to only keep 90% of those earnings by setting their take rate to 90%. The remaining 10% of that client's earnings is applied as a discount to the total fees their users are required to pay. This would mean that:
- Users of that client pay a fee of 0.291% instead of 0.3%.
- The 0.291% fee collected is distributed as follows:
- The utilized client keeps 0.081%.
- The protocol keeps 0.21%.
These fees are expressed as a percentage of the collateral amount supplied when increasing a position or the amount borrowed when adding leverage to a position.
For a detailed breakdown of how fees are calculated, refer to the Technical Docs.
I'm adding collateral just to improve my position's health factor on Aave. Is there a fee for this?
No. There are only two functions on the Position smart contract that collect fees: add, which increases the position size, and addLeverage, which adds leverage to the position using the base token balance.
Do I have to pay fees when reducing or closing my position?
No. Fees are collected only when increasing a position's size or whehn adding leverage to a position.