Fees
There are exactly two fees. They go to different places, are charged at different moments, and are easy to confuse — so here they are side by side.
| Swap fee | Exercise fee | |
|---|---|---|
| When | On every AMM trade | When a leg is settled after expiry |
| How much | 2% floor, rising with price divergence, capped at 100% | 0.5% |
| Of what | The USDC side of the trade | That leg's gross payout |
| Paid to | The pool — i.e. liquidity providers | The protocol's fee collector |
| Who pays | Whoever swaps | Whoever exercises |
There is no fee to mint an option, no fee to transfer one, no fee to add or remove liquidity, and no protocol cut of the swap fee.
The swap fee
Charged by the AMM, kept by the pool. It compensates liquidity providers for the impairment that trading against a continuously-repricing asset causes them, and it scales with how far the trade pushes the pool from fair value — the floor for ordinary trading, punitive rates for extraction at extreme divergence.
It is always taken in USDC. When you buy an option the fee is added on top of the USDC you specified; when you sell, it comes out of your proceeds.
The full curve, the reasoning and a table of representative rates are on Dynamic swap fee.
Not protocol revenue
Nothing from the swap fee reaches the protocol. It stays in the pool it was paid into, raising the value of that pool's LP shares.
The exercise fee
0.5%, charged on each leg's payout at settlement and sent to the protocol's fee collector address.
It applies per leg, to that leg's own entitlement, and only when the leg is actually exercised. A position worth 100 USDC at settlement pays out 99.5 USDC to the holder and 0.5 USDC to the collector.
Because both legs of an option are settled independently and each pays the fee on its own payout, the protocol's total take on a fully-settled option is 0.5% of the collateral.
Where it goes
This revenue is distributed to holders of the native token STFIN. It is the protocol's only revenue line.
Next
- Dynamic swap fee — why the trading fee moves
- Exercise & settlement — when the 0.5% is charged
- Providing liquidity — the side the swap fee is paid to