Fee Structure
Platform fees
Platform fees are charged for events within the Fringe Finance Platform. Events that may incur a fee include user interactions (such as taking out a loan) and some events do not involve a user interaction (such as interest being charged against a loan.)
Currently, fees are charged only as follows:
A percentage of interest paid by borrowers. This applies to Fringe Lending, the USB stablecoin facility, Fringe Amplify and Fringe Margin Trade. These fees are accumulated into the Fringe treasury.
A variable percentage of a liquidation, as described in Liquidations. These fees are paid to the liquidator as a reward for undertaking the liquidation function.
Even though fees are only charged as itemized above, Fringe may charge other fees in the future as needed to ensure the best balance of incentive-compatible participation in the Fringe ecosystem. The following table lists the possible fee events, who may be charged to and the basis of the fee.
Fringe Lending events
Fringe Amplify and Fringe Margin Trade events
USB Stablecoin facility events
Liquidation events
Staking events
Governance events
Denomination of platform fee charges
Fees charged to users of the platform are not paid in FRIN tokens. This would result in a poor user experience, where users would have to first purchase FRIN tokens to use the platform. The Fringe Finance platform avoids this friction.
The denomination of fees charged to users of the platform are as follows:
Portion of interest when repaying a borrow position: paid in the capital asset of the borrow position and accumulated into the Fringe Treasury.
Portion of interest when repaying a trading position: effectively paid by the trader in the collateral asset used to secure the trading position, but swapped for the capital (short) asset and accumulated into the Fringe Treasury.
Liquidation fees: paid in the liquidated collateral asset used to secure the borrow or trading position and paid to the liquidator.