How LPs Earn
Revenue Streams
1. Trading Fees (63% of total fee)
Every time a trader opens or closes a position, they pay a position fee (0.04% – 0.06% of position size). 63% of this fee flows directly into the specific market's Liquidity Pool, increasing the value of LP tokens for that pool.
2. Borrowing Fees (63% of borrowing revenue)
While traders hold leveraged positions, they pay a continuous borrowing rate. 63% of the accrued borrowing fees go to LP holders.
3. Liquidation Fees (63% of liquidation revenue)
When a trader is liquidated, a penalty is charged on the position size. 63% of this fee flows to the specific Liquidity Pool backing that trade to cover potential losses, while the remaining 37% goes to the protocol treasury.
4. Net Positive Outcomes (Trader Losses)
The Liquidity Pool acts as the counterparty for its specific market. When a trader loses money (PnL < 0), those losses remain in the pool. Since retail traders statistically lose more often than they win (especially with high leverage), the pool tends to grow over time from trader losses.
Fee Summary Table
Position Fee (open/close)
63%
37%
Borrowing Fee
63%
37%
Liquidation Fee
63%
37%
Funding Fee
0% (P2P)
0%
Fee Share Visualization
Every dollar of protocol revenue (from trading, borrowing, and liquidation fees) is distributed via a 63% / 37% split between the specific LP Vault and the protocol's fee router.
For a detailed visual map of this flow, see our Fee Transparency section.
APY (Annual Percentage Yield) Estimation
$10M
$50M
~45%
$50M
$200M
~30%
$100M
$400M
~27%
$500M
$1B
~22%
Note: APY fluctuates based on volume, trader PnL, and fee generation.
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