Fees

All fees on WaterX and how they are distributed.

Trading Fee

Charged on every open and close. Trading Fee consists of a Base Fee and an Impact Fee:

Trading Fee = Position Size × (Base Fee % + Impact Fee %)

Market	Base Fee	Max Impact Fee	Max Total Fee
Crypto	0.03%	0.03%	0.06%
xStock	0.05%	0.05%	0.10%

Impact Fee

The impact fee is a dynamic fee based on how your trade affects LP net exposure. Larger trades that worsen LP exposure incur higher impact fees.

Trades that reduce LP exposure → Impact Fee = 0. For example: if Long OI > Short OI and you open a Short, you help balance OI — no impact fee.

Trades that increase LP exposure → Impact Fee > 0:

LP Net Exposure (before) = Short OI − Long OI

LP Net Exposure (after):
  New Long  → before − Order Size
  New Short → before + Order Size

Exposure Change = |LP Net Exposure (after)| − |LP Net Exposure (before)|

If Exposure Change ≤ 0 → Impact Fee = 0
If Exposure Change > 0 →
  Order Value Ratio = (Exposure Change × Price) / (Total LP × Allocated LP Exposure %)
  Impact Fee % = Max Impact Fee % × min(1, (Order Value Ratio / Scale) ^ Curvature)

Parameter	Value
Allocated LP Exposure %	20%
Scale	1
Curvature	2

Worked Example (SUI/USD, Crypto market):

Assumptions:

• SUI Price = $3.50

• Long OI = 25,000 SUI, Short OI = 10,000 SUI

• Total LP = 35,000 USDC

• You open a 1,000 SUI Long

LP Net Exposure (before) = 10,000 − 25,000 = −15,000 SUI
LP Net Exposure (after) = −15,000 − 1,000 = −16,000 SUI
Exposure Change = |−16,000| − |−15,000| = 1,000 SUI

Order Value Ratio = (1,000 × $3.50) / (35,000 × $1 × 20%) = $3,500 / $7,000 = 0.5

Impact Fee % = 0.03% × min(1, (0.5 / 1)²) = 0.03% × 0.25 = 0.0075%

Trading Fee % = 0.03% + 0.0075% = 0.0375%
Trading Fee = 1,000 × $3.50 × 0.0375% = $1.31

If you opened a Short instead (reducing LP exposure), Impact Fee = 0, and Trading Fee = $3,500 × 0.03% = $1.05.

Funding Fee

Funding fees update hourly and keep perpetual prices aligned with spot. They accrue throughout the holding period.

Basic Funding Rate = 0.068%
Funding Index = Basic Funding Rate × (Net Position in USD / Total Tokens in WLP)
Funding Fee = (Current Funding Index − Entry Funding Index) × Position Size

• Long OI > Short OI → Longs pay Shorts

• Short OI > Long OI → Shorts pay Longs

See Funding Rate for details.

Borrow Fee

Borrow fees accrue hourly, dynamically adjusted based on utilization (OI / LP pool).

Hourly Borrow Fee = Hourly Borrow Rate × Position Size

Utilization	Hourly Borrow Rate	Annualized Borrow Rate
0% – 60%	0% – 0.001%	0% – 9%
60% – 80%	0.001% – 0.002%	9% – 18%
80% – 100%	0.002% – 0.008%	18% – 70%

Higher utilization means higher borrow rates, incentivizing LPs to deposit more.

Liquidation Fee

Charged upon liquidation:

Insurance Fund Fee = 1% × Position Size
WLP = Remaining Collateral − Insurance Fund Fee

Upon liquidation, all remaining collateral is taken. The Insurance Fund receives 1%, and the rest goes to WLP. See Liquidation & ADL for details.

WLP Fees

Action	Fee
Mint (deposit to WLP)	0% (free)
Redeem (withdraw from WLP)	0.01% (flat rate)

Gas Fees

Sui network gas fees are typically below $0.01. At launch, WaterX sponsors all transaction gas fees — you don't need to hold SUI to trade.

If the sponsor service is temporarily unavailable, you will need to pay gas yourself. Keep a small amount of SUI as backup. See Account & Deposits.

Fee Distribution

Fee Type	WLP	Protocol	Insurance Fund
Trading Fee	70%	30%	—
Borrow Fee	70%	30%	—
Funding Fee	100% (net to LP)	—	—
Liquidation Fee	Remaining collateral	—	1% × Position Size
Redeem Fee	—	100%	—

WLP's share of trading fees and borrow fees auto-compounds into the pool, increasing the WLP NAV.

Trading fees range from 0.03%–0.06% (Crypto) and 0.05%–0.10% (xStock). The impact fee rewards traders who help balance OI. 70% of trading and borrow fees go to WLP holders. Minting is free; redeeming costs 0.01%.