The Float protocol, Float team, and Float treasury receive no fees.
All fees are paid to the Float pool, as an incentive for liquidity providers to occupy the Float pool and take the risk of balancing liquidity between the long and short pools.
Stability fee (Mint fee)
When a user mints a position in a market they pay a stability fee.
The fee is charged on the effective amount of a position being minted. To obtain the the effective amout of a position, multiply the actual size of the position in the underlying collateral, by the leverage of the pool.
The stability varies between 1.5 basis points to 4 basis points per market.This may change in future.
For example, if a user mints $1000 in a 5x long ETH pool which has a 2 basis point fee (0.02%), the calculation will be:
Alternatively, a $1000 mint in 3x short ETH pool will be:
The stability fees are the same regardless of market side i.e. long vs short.
The funding rate is a continuous fee paid by the long and short sides to the Float pool.
Funding rates are paid at each price epoch or trade batch. The rate to be paid scales with the imbalance between the effective long and short liquidity in the market at that epoch. The greater the imbalance the greater the funding rate required. Funding is paid to the Float pool by both the long and short sides of the market, with a greater share being paid by the overbalanced side according to the following formula:
Funding paid by the overbalanced side is calculated using:
Funding paid by the underbalanced side is calculated using: