Fee Transparency

MegaBanX is committed to full transparency regarding its fee structure. Every fee collected on the platform is routed through smart contracts with no hidden middleman. This ensures that the protocol, liquidity providers (LPs), and stakers are rewarded fairly for their contribution to the ecosystem.

Process Flow Overview

The following diagram illustrates how transaction fees are captured and distributed across the protocol. It details the flow from the initial trade/liquidation event to the final distribution among LPs, stakers, and the treasury.

MegaBanX Fee Flow Infographic

1. Trader Transaction Fees

Every trade, liquidation, and borrowing event on the MegaBanX platform triggers a transaction fee. These fees are denominated in USDC (with future support for USDm) and represent 100% of the total inflow into the distribution system.

• Open & Close Fees: Charged per trade based on position size. See details.

• Borrowing Fees: Paid for the use of pool capital (leverage). See details.

• Liquidation Fees: Collected when a position is liquidated. See details.

2. Primary Distribution Split (63/37)

Once collected, revenue-generating fees are immediately split into two primary buckets:

• MWLP Vaults - 63%: Flows directly into the isolated liquidity pools.

• Protocol Revenue - 37%: Sent to the Fee Router for distribution.

3. What is MWLP?

MWLP stands for MegaBanX Weighted Liquidity Pool.

Unlike many platforms that use a single shared index, MegaBanX utilizes Isolated Liquidity Vaults for each trading pair. When you see MWLP in the diagram, it refers to the specific vault providing liquidity for your trade.

MWLP is an accrual-based token. Transaction fees are added directly to the vault's assets. Since Price = Total Assets / Token Supply, every fee added to the vault directly increases the price (value) of every MWLP token in circulation. This is auto-compounding value for LPs. Learn how LPs earn.

4. Protocol Revenue Routing

The Fee Router further divides the 37% protocol revenue into two final destinations:

• MBX Staking Rewards (30%): Distributed daily as real-yield rewards to users who stake their MBX tokens. Staking guide.

• Protocol Treasury (7%): Allocated to the treasury for future development, marketing, and ecosystem growth.

5. Peer-to-Peer Market Balancing (0% Protocol Fee)

Some fees exist purely to keep the market healthy and are not protocol revenue. These are direct Peer-to-Peer (P2P) transfers between traders.

• Funding Fees: When the market leans too heavily in one direction (e.g., more Longs than Shorts), the majority side pays the minority side to incentivize balance. Funding fee logic.

• Price Impact Fees: Traders who increase market imbalance pay a fee that is stored in an Impact Pool, which is then used to reward traders who help restore balance. Price impact details.

6. Borrowing vs. Funding: What’s the Difference?

Traders often confuse these two, but they serve completely different purposes within the ecosystem:

Feature	Borrowing Fees	Funding Fees
Who Pays?	All Traders (Longs and Shorts).	Only the Majority Side (the side with more "Open Interest").
Who Receives?	The MWLP Vault (the LPs).	The Minority Side of traders (P2P).
Purpose	To pay LPs for "renting" the assets used for your leverage.	To incentivize traders to balance the market (reduce skew).
Protocol Revenue?	Yes (split 63/37 shared with protocol/stakers).	No (0% Fee, 100% stays between traders).
Calculation	Based on Pool Utilization (how much of the vault is currently borrowed).	Based on Trade Skew (the imbalance between total Longs vs. Shorts).

In Layman's Terms:

• Borrowing Fee is like paying interest to a bank for a loan.

• Funding Fee is like a tax on the popular side of a trade that gets paid directly to the people taking the opposite side, just to keep the market healthy.

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[!IMPORTANT] All protocol fees and rewards mentioned are denominated in USDC, providing stable and predictable yield for all participants.