Protocol Fees
Last updated
USDN Protocol
Last updated
Three different fees are implemented in the USDN protocol. Here’s how each fee works:
Long Position: A fee (_positionFeeBps) of 0.04% is charged on the provided price at both the opening and closing of a position.
Vault: For each deposit or withdrawal of USDN tokens, a fee (_vaultFeeBps) of 0.04% is charged on the deposited amount of assets.
Destination: These fees are directly transferred to the Vault and, by extension, to USDN holders.
When USDN tokens are minted, a unique mechanism is applied: 5% of the total amount of minted USDN must be paid in SDEX tokens, the native token of the SmarDex ecosystem.
How does it work? If you mint 100 USDN, 5% of that amount must be paid in SDEX tokens, meaning 5 SDEX tokens in this example (not $5 worth of SDEX). This mechanism reduces the supply of SDEX, thereby increasing its value for the benefit of all holders.
Whenever funding is applied on one side or the other, a fee (_protocolFeeBps) of 8% is applied to the transferred amount.
Destination: This fee is accumulated within the protocol until it reaches a predefined threshold. Once the threshold is met, the accumulated fees are sent to a fee collector.
