Protocol fees

Upfront Fees On Spot Trading :

• A 0.5% fee is applied on the collateral used when opening a trade in Spot Funds only.

• Currently, 100% of this fee is used to buy back and burn the ST token.

• This fee may be discounted by 50% based on the amount of xST the trader has staked. See the table below for details.

xST	Discount
≥ 100	3.0%
≥ 500	5.0%
≥ 2 000	7.5%
≥ 5 000	10.0%
≥ 10 000	15.0%
≥ 20 000	20.0%
≥ 50 000	25.0%
≥ 100 000	30.0%
≥ 200 000	35.0%
≥ 400 000	40.0%
≥ 1 000 000	45.0%
≥ 2 000 000	50.0%

Performance fees

Performance Fees Traders can set performance fees for their fund at any rate between 0% and 50%. The way these fees are calculated differs depending on whether the fund is Spot or Perpetual.

Performances fees for PERP funds

Performance Fee Structure A performance fee is applied whenever a trade closes in profit.

Protocol’s Share For every profitable trade, the protocol retains 20% of the performance fee, which is then fully redistributed to xST stakers.

Let’s imagine a trading fund with a Total Value Locked (TVL) of $100,000. Out of this amount:

• The trader’s own deposit: $20,000

• The combined investors’ deposits: $80,000

When a trade closes in profit, 20% of those profits are allocated as the performance fee. This fee is then split:

• 80% goes to the trader

• 20% goes to ST stakers

The remaining 80% of the trade’s total profit (i.e., the portion not taken as the performance fee) is distributed to the investors.

Profit Distribution

Example Here’s how profits would be allocated when the trader achieves a 100% profit on a fund with a $100,000 TVL—of which the trader contributed $20,000 and investors contributed $80,000.

1. Trader’s Base Share

   • The trader owns 20% of the fund, so they automatically receive $20,000 of the profits, with no fees applied to their own share.

2. Investors’ Share

   • The remaining $80,000 in profits is attributed to the investors. From this, the following split occurs:

     • Investors receive 80% of $80,000 = $64,000 (allocated proportionally based on each investor’s stake in the fund).

     • Performance Fees (20% of $80,000) = $16,000.

3. Performance Fee Breakdown

   • Trader receives 80% of the performance fees = $12,800.

   • ST Stakers receive 20% of the performance fees = $3,200.

This transparent profit distribution model ensures that traders, investors, and ST stakers all benefit fairly from the fund’s successful trades.

Performances fees for SPOT funds

Performance Fees for Spot Funds (High Water Mark Mechanism) In Spot funds, performance fees apply only to profits that exceed the highest previously achieved value of an investor’s shares—this is the High Water Mark. Each investor’s high water mark is set by their share price at the last fee payment. The trader must surpass this share price to earn the next performance fee.

Example of Performance Fees Distribution for SPOT funds:

1. Initial Deposit: Investors deposit a total of $1,000 into the fund.

2. First Profit: The trader grows the fund by 4×, creating $3,000 in profits (total fund value of $4,000).

3. Performance Fee (20%):

   • Total Fee: $600 (20% of $3,000).

   • Trader’s Share (80%): $480.

   • xST Stakers’ Share (20%): $120.

4. Subsequent Losses: After some poor trades, the fund’s value drops back to $1,000, wiping out previous gains.

5. New Gain (3×): The trader recovers the fund from $1,000 to $3,000. However, no new performance fee is charged because the fund’s value ($3,000) is still below the previous high ($4,000). The share price must exceed that previous high water mark for the trader to earn another performance fee.

Fee Discounts for xST holders :

Note: These fee reductions specifically affect the portion of performance fees that would otherwise be allocated to the Protocol.

xST	Discount
≥ 100	3.0%
≥ 500	5.0%
≥ 2 000	7.5%
≥ 5 000	10.0%
≥ 10 000	15.0%
≥ 20 000	20.0%
≥ 50 000	25.0%
≥ 100 000	30.0%
≥ 200 000	35.0%
≥ 400 000	40.0%
≥ 1 000 000	45.0%
≥ 2 000 000	50.0%

Management Fees

When setting up a fund, managers can choose to apply a management fee ranging from 1% to 5% of the fund’s assets annually (Assets Under Management, or AUM). Half of the fees collected go to the trader, while the other half is used by the protocol to buy back and burn ST tokens, thereby reducing the total supply.

Example Consider a fund with a 4% management fee and an average $1 million in AUM over one year. The fund would collect $40,000 in management fees:

• $20,000 goes to the trader.

• $20,000 is used by the protocol to buy back and burn ST tokens.