> For the complete documentation index, see [llms.txt](https://docs.nectarliquid.com/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.nectarliquid.com/trading/fees.md).

# Fees

This page covers all fees on Nectar Liquid, including trading fees, swap fees, price impact, funding, borrowing, and network fees. These fee structures function across both Nectar Liquid Mainnet and Nectar Liquid Beta Testnet environments. On the testnet, fees are processed using test gas and test collateral assets, allowing you to simulate live trading costs without deployment risk.

#### Open and Close Fees

The position fee is 0.04 percent or 0.06 percent of the total position size. This fee applies uniformly when opening, closing, increasing, or partially decreasing a leveraged position.

The specific rate applied depends on whether your transaction layout improves the dynamic balance between long and short open interest across the protocol:

* 0.04 percent: Your trade reduces the absolute difference between long and short open interest.
* 0.06 percent: Your trade increases the absolute difference between long and short open interest.

For example, if the market currently holds more long open interest than short open interest, opening a short position reduces that absolute imbalance and qualifies directly for the lower 0.04 percent fee. Conversely, opening another long position under those same conditions increases the overall imbalance and incurs the 0.06 percent fee.

Most standard crypto markets use these exact base rates. Localized asset markets employ custom rate tiers to account for unique regional liquidity profiles and specialized trading schedules. For example, the `CNGN/USD` market implements a reduced on-hours fee structure of 0.01 percent for balance improvements and 0.02 percent for balance deviations. During scheduled off-hours, the rates transition to a standard 0.04 percent and 0.06 percent format.

#### Swap Fees

Swap fees on Nectar Liquid vary based on the specific market categorization, distinguishing between standard crypto assets and stablecoin token pairs. The final fee also depends on whether your swap improves or worsens the asset balance within the pool. All protocol swap fees are calculated directly on the initial swap input amount.

Standard Swap Fees For standard asset swaps, the processing fee is either 0.05 percent or 0.07 percent of the total swap volume:

* 0.05 percent: Applied if the swap decreases the net USD imbalance between the long and short token pools.
* 0.07 percent: Applied if the swap increases the net USD imbalance between the long and short token pools.

The pool balance execution check automatically compares the absolute USD difference between the long and short token pool values immediately before and after your transaction completes on Asset Chain. If the post-swap value difference is lower than the pre-swap state, the lower fee tier is awarded.

Stablecoin Swap Fees Stablecoin swap markets feature significantly lower fee parameters compared to standard crypto asset pools. On both mainnet and testnet deployments, standard stablecoin pairs carry a minor 0.005 percent fee if the transaction improves pool balance, and a 0.02 percent fee if the transaction shifts the pool further out of balance.

Single Token Pool Exceptions Single token pools where both the long and short asset are the same token incur zero swap fees on any active position operation. Because the collateral, PnL settlement, and pool backing utilize the exact same underlying asset, no token conversions are executed by the smart contracts. Major single token markets like `WBTC/USD` and `WETH/USD` also configure their core position impact factors to zero, neutralizing price impact entirely across those specific venues.

#### Slippage

Slippage represents the potential variation between the expected execution price visible when you submit a trade request and the final price recorded when a keeper commits that order to the blockchain. This variation is driven by fast market asset movements during the brief confirmation window.

The default allowable slippage threshold across our platforms is configured to 1 percent and can be adjusted inside your terminal settings module. Slippage targets market orders exclusively. Limit and conditional trigger orders utilize fixed acceptable price bounds configured at order creation instead.

When you broadcast a market order, the frontend interface automatically computes an acceptable price boundary by applying your slippage tolerance parameter to the current oracle mark price. At execution, the smart contract verifies whether the live price satisfies that acceptable price boundary and reverts the transaction if the conditions fail.

Consider a Market Increase request on the `WETH/USD` pair:

* Expected Entry Execution Price: $4,000 for a long position.
* Actual Price at On Chain Execution: $4,080 due to high market volatility.

Because the asset price moved higher prior to execution, this represents unfavorable slippage for a long position. The smart contracts will block execution and revert the transaction unless your manual allowed slippage parameter was configured to 2 percent or higher. The platform permits custom slippage parameters up to an absolute maximum cap of 5 percent, with the interface highlighting a warning notice for any values exceeding 2 percent.

#### Slippage Dynamics on Nectar Liquid Versus AMM Platforms

On traditional automated market makers and standard decentralized exchange aggregators, slippage calculations consolidate both organic oracle price movements and the direct liquidity impact of your trade size.

Nectar Liquid separates these actions into two distinct protocol mechanisms:

* Slippage protects exclusively against oracle price movements that transpire between the second you submit an order and the second a keeper commits it.
* Price Impact functions as an independent adjustment based on pool balance states, calculated and applied separately at the moment of execution.

The expected transaction output displayed on the Nectar Liquid trade terminal already factors in all estimated platform fees and price impact metrics. Your manual slippage setting serves as an independent safety buffer built on top of that initial estimate to guard against extreme oracle fluctuations during the execution window.

#### Price Impact and Price Impact Rebates

Opening a new leveraged position on Nectar Liquid incurs zero price impact at entry. Your initial entry price is determined by the live oracle stream, using maxPrice for long positions and minPrice for short positions. Price impact is calculated from the net open interest imbalances generated by collective opens and closes, but it is charged or credited exclusively when you close or decrease an active position.

Net price impact can fluctuate positively or negatively up to market specific caps. Unlike traditional orderbook venues, Nectar Liquid implements hard caps on negative price impact to protect large traders from orderbook depth deficiencies. Furthermore, positive price impact layouts mean you can be credited capital by the protocol for executing trades that balance the system.

Price Impact Formula Price impact is calculated directly from the absolute shift in pool imbalances caused by a transaction:

Plaintext

```
priceImpact = (initialImbalance ^ exponent × factor) − (finalImbalance ^ exponent × factor)
```

Where:

* `initialImbalance`: The absolute difference between long and short metrics prior to the trade.
* `finalImbalance`: The absolute difference between long and short metrics after the trade completes.
* `factor` and `exponent`: Independent per market configuration parameters.

For perpetual position management, the imbalance components map to the absolute difference between long and short open interest. For asset swaps, the variables track the absolute USD difference between the long and short token pool values.

When a trade reduces the pool imbalance, the mathematical result is positive, giving the trader an improved execution price. When a trade increases the imbalance, the result is negative, giving the trader a less favorable execution price. If a large transaction crosses the absolute balance equilibrium point, the calculation automatically splits. The portion moving toward absolute balance applies the positive parameter path, while the remaining portion passing the balance point applies the negative parameter path.

For position closing operations, the net price impact scales your underlying collateral value independently rather than altering the displayed historical mark price. For example, if a position closes at a mark price of $1,900 with an accompanied positive net price impact of +$1, your historical execution log displays $1,900, but you receive an additional $1 in collateral value, making your effective close value $1,901. Conversely, a negative net price impact of -$1 results in a $1 deduction from your distributed collateral.

Price Impact Caps by Market Negative and positive price impact tracks separate threshold caps. The maximum positive price impact is standardized to 40 basis points for most core markets, while the maximum negative price impact caps change based on the liquidity depth of the underlying asset class.

Negative price impact caps by market layout:

* Major Crypto Markets (WBTC, WETH): 50 basis points (0.5 percent) maximum cap.
* Localized and Lower Liquidity Markets (CNGN): Tiers ranging from 100 basis points to 500 basis points depending on live liquidity depth configurations.

If an execution experiences a negative net price impact that breaches the designated market cap parameter, the excess fee amount is directed to a protocol ledger and becomes claimable as a price impact rebate after an automated five day security delay designed to eliminate system manipulation. You can track and claim these balances within the claims module on the platform interface.

#### Funding Fees

Funding fees can function as an operational cost or an account credit while a leveraged position remains active. The live funding rate is continuously visible on the trade panel and changes dynamically based on the absolute balance of longs and shorts across the market. Positive funding credits can be harvested manually using the Claim button within the trading console.

Adaptive Funding Mechanics Nectar Liquid implements an adaptive funding model where rates adjust gradually based on the explicit ratio of long to short open interest. A sudden, massive shift in open interest does not cause an immediate inversion of the funding rate direction. The previously dominant side may continue to pay funding until the continuous on chain rate parameters adjust.

The specific open interest imbalance ratio used to drive rate updates is calculated as follows:

Plaintext

```
longShortImbalance = [abs(longOpenInterest - shortOpenInterest) / totalOpenInterest] ^ fundingExponentFactor
```

Whether the long and short open interest inputs utilize raw USD notions or token denominated values depends on the specific contract configuration parameters of that market. The adaptive rate shifts across three distinct zones defined by this imbalance relative to two system thresholds:

* Above Stable Threshold: The market open interest imbalance is wide. The rate increases continuously per second based on the imbalance multiplier until open interest aligns or the rate hits its maximum ceiling.
* Between Thresholds: The funding rate remains locked and constant.
* Below Decrease Threshold: The market open interest balance is tight. The funding rate decreases continuously per second toward zero.

The absolute ceiling that the adaptive funding rate can reach is configured per market and is stored securely within the protocol data registry contracts across our mainnet and testnet deployments.

Accrual and Settlement Funding fees accrue continuously using per second calculations. The total funding accrued for the paying side of a market over a given period is calculated as follows:

Plaintext

```
fundingUsd = sizeOfPayingSide × durationInSeconds × fundingFactorPerSecond
```

Settlement is entirely event driven and occurs whenever a transaction interacts with the target market smart contracts. When a user modifies, increases, or completely closes a position, the system computes the exact funding fees owed using a checkpoint tracking pattern:

Plaintext

```
positionFundingFeeAmount = positionSizeInUsd × (latestFundingAmountPerSize − position.fundingFeeAmountPerSize) / PRECISION
```

#### Borrow Fees

A continuous borrow fee applies to all open positions to prevent traders from locking up pool liquidity indefinitely by opening opposing long and short trades at minimal cost. Only the dominant side of the open interest pays the borrow fee. If long open interest exceeds short open interest, longs pay the fee. If short open interest dominates, shorts pay the fee.

The borrow fee accrues continuously per second and settles when a position is modified or closed:

Plaintext

```
borrowingFeeUsd = positionSizeUsd × (cumulativeBorrowingFactor − positionBorrowingFactor)
```

Rate Models Most core markets employ a two segment kink model where the borrow fee rate increases linearly up to an optimal pool utilization threshold, and then escalates sharply above that boundary:

Plaintext

```
borrowingFactorPerSecond = baseBorrowingFactor × usageFactor

if usageFactor > optimalUsageFactor:
    diff = usageFactor − optimalUsageFactor
    additional = (aboveOptimalUsageBorrowingFactor − baseBorrowingFactor) × diff / (1 − optimalUsageFactor)
    borrowingFactorPerSecond += additional
```

Of the total borrow fees collected by the smart contracts, 63 percent is directed into the Nectarliquid pool to accrue directly to the value of liquidity provider tokens, while 37 percent is routed to the protocol fee receiver contract.

#### Network Fee

Every transaction executed on Nectar Liquid requires a two phase execution framework comprising your initial wallet request and a subsequent keeper execution transaction on Asset Chain. The network fee covers the explicit blockchain gas cost required to process that second keeper transaction.

The operational workflow loops through the following actions:

1. You submit a transaction request from your wallet to log an action such as opening a trade, depositing collateral, or requesting a close.
2. An automated network keeper observes this request on chain and executes the final state transition inside a separate transaction block.

Because network gas prices can fluctuate between your request submission and the keeper confirmation, the platform charges a maximum network fee upfront that intentionally overestimates the execution cost. When the keeper completes the transaction, only the exact gas consumed on Asset Chain is paid out. The smart contracts automatically calculate the variance and refund the remainder directly back to your wallet address.

On Nectar Liquid Mainnet, these transactions utilize native mainnet gas tokens. On the Beta Testnet, the interactions process using testnet gas tokens. Due to Asset Chain's scalable, high performance architecture, these real world network costs remain exceptionally small. If you configure a position containing attached conditional Take Profit or Stop Loss instructions, the initial maximum network fee will include the upfront gas allocations for those extra orders. If those conditional targets are canceled or never trigger, their associated network fee balances are refunded to your wallet in full.

#### Builder Fees (UI Fees)

Nectar Liquid features a native **Builder Fee** mechanism that enables external frontends, wallets, Telegram bots, copy-trading tools, and algorithmic aggregators to monetize their trading flow.

* **Fee Structure**: Builders can configure a custom fee rate between 0 and 5 basis points (0.00% to 0.05% of notional trade size).
* **Protocol Fee Cap**: To ensure trader safety and transparency, the protocol enforces a strict upper ceiling of **5 bps**. Builders cannot unilaterally raise fees above this cap.
* **Governance Review**: Newly registered builders default to a 0 bps fee policy. Any increase in builder fee rate requires formal submission via the builder API/portal and protocol governance approval before going live.
* **On-Chain Settlement**: When an order is created, the integration specifies the builder's assigned `uiFeeReceiver` address. When keepers execute the order, the builder fee is deducted and routed to the builder's registered treasury wallet.
* **Attribution**: Traders accessing the platform through a builder referral link (`?builderId=<id>`) or builder API key are permanently attributed to that builder upon first touch, allowing builders to track volume, active users, and monthly rewards.

For full developer details on registering as a builder, generating API keys, and integrating `uiFeeReceiver`, see the [Builders & Developers Guide](/builders.md).

#### Arbitraging

Nectar Liquid's combined fee and price impact parameters create continuous arbitrage opportunities across perpetual and swap markets for users who execute trades that restore balance to the protocol.

Perpetuals Arbitrage Traders can capture positive price impact and funding fee credits on imbalanced perpetual markets. If long open interest heavily outweighs short open interest on an asset, opening a short position reduces that systemic imbalance.

The smart contracts will award you a positive price impact, resulting in an entry price execution superior to the current market mark price. Furthermore, while your position remains open, you will collect continuous funding fee credits from the dominant long side.

For markets where the index token matches your chosen margin asset, you can build a delta neutral short position by posting that index token as your primary collateral. This framework allows you to harvest steady adaptive funding income while completely insulating your account value from directional asset price risk.

Swaps Arbitrage Swap market price impact is derived from the absolute USD variance between the long token pool value and the short token pool value. If an external swap reduces that absolute pool difference, the transaction receives a positive price impact adjustment, distributing extra output tokens beyond the baseline asset swap ratio.

For example, if the total USD value of WETH held within a pool exceeds the USD value of USDC, executing a swap converting USDC into WETH reduces that imbalance, allowing the arbitrageur to extract extra WETH output from the protocol. Pool statistics and hourly funding rate snapshots can be verified via our REST API endpoints or directly on the platform Statistics dashboard.


---

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