Protocol Fees

Overview

Protocol fees are generated in three ways:

• Network fees

• Trading fees

• Collateralized Debt Position (CDP) fees

Fee Types

This table contains an explanation on each type of fee:

Network Fees

Network Fees

Network fees are charged for each transaction on Carbon.

Here are the current network fees for each action:

• Creating an order - Free

• Withdrawing assets - Free (L1 or relayer fees apply separately)

• Claiming staking rewards - 1 SWTH (per validator)

• Committing or unlocking LP tokens - 30 SWTH

• Claiming LP rewards - 30 SWTH (per pool)

• Submitting a governance proposal - 1000 SWTH

• Creating a liquidity pool - 1000 SWTH

• Creating a market or token - 5000 SWTH

• All other non-EVM transactions - 1 SWTH

• EVM transactions - varies depending on EVM gas usage

⌛ For the most updated list of network fees, use this API endpoint.

Network fees for all transactions go towards block rewards.

👍 To encourage wide-spread adoption of Carbon, the protocol allows users to select a preferred token to use for network fees. Learn more here.

Trading Fees

Trading Fees

Carbon uses a maker-taker model for determining trading fees. This means that there are two types of trading fees on Carbon — Maker and Taker fees:

• Maker Fees: Fees charged to users who create orders that are not immediately filled by existing orders on the order book. These users are known as "makers" because they are adding liquidity to the exchange by creating new orders.

• Taker Fees: Fees charged to users who place orders that are immediately filled by existing orders on the order book. These users are known as "takers" because they are taking liquidity from the exchange by executing trades against existing orders.

Trading fees are levied as a percentage of the trade's value and go fully towards block rewards.

Tier-based Fees

An account's specific trading fees are determined by their fee tier, which is in turn derived from the amount of SWTH held or staked by the account. The more SWTH held or staked, the lower the trading fees. This trading fee discount can be delegated to another Carbon account.

The table below shows are the default fee tiers for spot and derivative markets.

Derivative Markets (Futures & Perpetuals)

Tier	SWTH points*	Maker Fee	Taker Fee
Plankton	< 15,000	0.10%	0.15%
Prawn	≥ 15,000	0.08%	0.14%
Crab	≥ 150,000	0.07%	0.13%
Fish	≥ 750,000	0.05%	0.12%
Dolphin	≥ 3,750,000	0.04%	0.11%
Orca	≥ 15,000,000	0.02%	0.10%
Whale	≥ 37,500,000	0.00%	0.08%
Leviathan	≥ 75,000,000	-0.01%	0.05%
Perp Pools	N/A	-0.08%	0.00%

Spot Markets

Tier	SWTH points*	Maker Fee	Taker Fee
Plankton	< 15,000	0.10%	0.30%
Prawn	≥ 15,000	0.09%	0.28%
Crab	≥ 150,000	0.08%	0.25%
Fish	≥ 750,000	0.07%	0.20%
Dolphin	≥ 3,750,000	0.06%	0.10%
Orca	≥ 15,000,000	0.05%	0.08%
Whale	≥ 37,500,000	0.03%	0.05%
Leviathan	≥ 75,000,000	0.01%	0.02%

*The calculation for SWTH points as follows:

• Every 1 staked SWTH counts as 1 SWTH point

• Every 1 rSWTH in an account's available balance counts as 0.9 SWTH points

• Every 1 SWTH in an account's available balance counts as 0.5 SWTH points

• Tokens in open orders or liquidity pools do not count towards SWTH points!

Please note that specific markets may have different fee structures, and the above tiers are subject to changes by Carbon governance. For the most updated fee tier information, visit the markets page on the Carbonscan explorer.

Collateralized Debt Position (CDP) Fees

Collateralized Debt Position (CDP) Fees

CDP fees include fees on borrowing interest, fees on liquidation bonus, and stablecoin interest.

• The borrowing interest (i.e. interest that borrowers pay lenders) is set by the utilization rate (i.e. supply and demand). A fee (currently 10%) is imposed on the interest that is paid out, and this portion goes towards block rewards instead of the lender.

• When a position is considered unviable, they are open to being liquidated. This is done by allowing any user (the ”liquidator”) to repay the position’s debt. In return, the liquidator seizes the position’s collateral equal to the repaid debt’s value minus a liquidation discount. This results in a bonus amount of collateral seized, and a fee (currently 10%) is imposed on this bonus, that goes towards block rewards instead of the liquidator.

• When users deposit assets to mint the protocol’s stablecoin, USC, the debt incurs a continuously accruing interest (the "stability fee") which is designed to maintain USC's dollar peg. All of this interest goes towards block rewards.