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Fees & Costs
This page describes the fees and costs that may be incurred by Participants in the Aver DEX as of 1 June 2022.
The mechanism, structure and level of fees and costs may vary in the future as the Aver DEX, the Aver Protocol and Solana evolve. It is possible that in the future, fees may vary between markets. It is the responsibility of each Participant to understand the fees that are applicable to them - this may vary by Market and by Participant.
Fees are collected from Markets to fund the cost of continuous development of the Aver DEX, the Aver Protocol and any features they have or may have in future.
The use of fees is subject to change. For example, in the future, some fees may be be applied to reward Contributors or Participants who may play various roles in enabling the functioning of Markets.
You only pay fees when making a profit on a Market.
This is aligned with participants' best interests and in contrast to most decentralised exchanges, where fees are incurred at the point of a trade on the value of the entire trade. No fees are incurred during the active trading of the Market on Aver DEX.
On settlement, fees are calculated as follows:
Payout is the amount of funds payable to the Participant on settlement of a resolved Market. This includes return of stake as well as any idle funds within the Market which were not exposed to any given outcome at the time the Market ceased trading.
NetFundsIn is the amount of funds which were transferred into the Market, less those which had been withdrawn prior to the Market closing. Note that it is not possible for more funds to be withdrawn from the Market than were deposited prior to the Market being settled. (i.e. this value cannot be negative).
The Participant’s profit is calculated as MAX( Payout - NetFundsIn , 0)
FeeRate_T is determined based on the Market’s fees and the user’s fee tier T when they last interacted with the Aver Protocol. The Participant incurs a fee as a proportion of this amount.
No fees are levied in the case of voided Markets; Participants’ funds are simply returned in their entirety.
There are six fee tiers, with the first tier representing the default case for Participants, with each sequentially higher fee tier representing an incremental discount in the fees they pay.
The primary factor in determining the fee tier to which a Participant is eligible is the Participant’s holding of AVER Tokens. However, Participants may be entitled to elevated fee tiers for other reasons - either temporarily or indefinitely - for example, the presence of a Rewards Program NFT or other on-chain rewards available from time-to-time.
The AVER token has not yet been released, but the current proposed fee tier model for future AVER token holders is set out below.
It is not possible to ‘stack’ criteria to fee tiers, and the Aver Protocol will allow Participants to count only one (i.e. their most favourable) criteria for fee tier discounts. For example, if a Participant had both a Community Rewards NFT (Tier 1) and 250k AVER Tokens (Tier 2), he/she would be entitled to Tier 2 fees.
Eligibility is based on the presence of Aver Tokens (or one of the eligible NFTs) held by the same Wallet as that used to interact with Aver. Eligibility is assessed each time a Participant interacts with the Aver Protocol, and the fee tier updated as applicable. When settlement occurs the fee rate applied is based on the Participant’s criteria at this point.
Referral revenue share Under Aver’s referral scheme, existing Aver participants can share in the winnings of those who they refer to the community. Under this model, a proportion (currently 5%) of the fees incurred by Participants are shared with referring Participants. For those Participants who are referred, there is nothing to lose as the referral share is not additive and the fees paid by them are unaffected by whether or not they have been referred by another Participant.
When interacting with any decentralised application on the Solana blockchain there are minuscule costs incurred when authorising transactions. These transaction costs (0.00005 SOL, or approximately $0.0025) reward the Solana network validators.
In addition, Solana also has the concept of ‘rent’ - where there is a sort of ‘deposit’ paid for data to be retained on-chain. This is fully recoverable once the Market is closed and that data is no longer required to be stored on Participants’ behalf. In this way, the network infrastructure costs are incurred at cost price and for exactly the usage incurred by any Participant.
There is no infrastructure/network cost component passed onto Participants, and no risk or profit margin implicit within it. The fact that these costs are incurred directly by the Participant at cost price is one of the reasons why Participating in the Aver DEX involves a fraction of the cost of traditional incumbents in the space.