Fees

RFX introduces a dynamic fee structure to balance open interest and further incentivise liquidity providers. Unlike existing Perp DEXes, RFX introduces market-aware and liquidity-sensitive fees, maintaining a competitive edge while properly compensating LPs. The fee structure considers factors like open interest skew, asset contemporaneous volatility, and available liquidity, promoting accurate pricing and balanced LP compensation.

Lifecycle of a Trade on RFX

Open / Close Fee

The trading fee to open a position is 0.05% of the position size, similarly there is a 0.05% fee when closing the position, whether partially or fully.

Swap Fees​

The fees for a normal swap are 0.05% or 0.07% of the swap amount.

If the trade increases the balance of tokens in the pool then the fee would be 0.05%, otherwise the fee would be 0.07%.

The fees for stablecoin swaps are 0.005% and 0.02% of the swap amount.

If the trade increases the balance of tokens in the stablecoin pool then the fee would be 0.005%, otherwise the fee would be 0.02%.

Borrowing Fees​

Borrowing Fees are only paid by positions that add to the risk of the liquidity pool, i.e. if there are more longs than shorts then longs would pay the borrowing fee, and vice versa.

Borrowing Fees are directly deducted from Open Positions and are charged for the duration a position is kept open.

The borrowing fee rate can be viewed on the Order Ticket when making a trade. Note that the rate will change over time based on the pool utilization percentage.

Funding Fees​

Funding fees are a payment from longs to shorts or short to longs depending on the open interest imbalance. As a result, there may be positive or negative funding fees while a position is open.

Positive funding fees indicate that longs are paying shorts, and negative funding fees indicate the opposite. The funding fee rate can be viewed on the UI when making a trade. Note that the rate will change over time based on the balance of longs and shorts.

If you receive positive funding fees for your position, these fees can be claimed by using the "Claim" button in the "Claims" tab of the Portfolio page.

RFX uses a Sigmoid Curve to calculate funding fees.

Sigmoid Funding Curve

While linear or simpler models offer initial solutions, their lack of adaptability can lead to inefficiencies and potential market manipulation. A more responsive function is required to adapt to the rapid changes in market dynamics, ensuring fair and balanced funding fee calculations.

The sigmoid function’s smooth transition and bounded output offer predictability and stability in funding fee rates, essential for maintaining market integrity and preventing extreme fluctuations.

The RFX Sigmoid Function is a tailored variant of the traditional sigmoid, specifically designed for RFX applications. It incorporates parameters like pivot, convexity, max fee, and slope, allowing for fine-tuned control over the function’s shape and responsiveness to changes in the input (Open Interest Imbalance). This version is the standard implementation used in RFX models, balancing computational efficiency with the precision needed for financial calculations.

The adoption of the sigmoid function in funding fee calculations significantly influences the behavior of market participants, potentially leading to more sta- bilized market conditions and fairer fee distribution.

By implementing a responsive and balanced fee structure, the RFX Sigmoid Function can mitigate excessive speculative trading and encourage healthier market liquidity.

Network Fee​

The network fee is paid to the blockchain network when the order is executed. When the order is executed, any excess amount is sent back to your wallet.