Fees

One rule underneath#

The protocol is paid out of what a position wins, never out of what it risks. Both venues follow that rule; they differ only in the shape the arithmetic forces on them.

Risk classes and the rate card#

Every market belongs to a risk class fixed by its template, and the class fixes the rate. Rates rise with the cost and the discretion of resolution.

The 7% rate on class D is exactly the protocol's ceiling: MAX_RATE_BPS is a compile-time constant of 700 basis points with no setter anywhere, so a higher rate for any class is unimplementable under the protocol's own code. The tier discount ceiling is likewise a constant, 4,000 basis points. A configuration contract that could raise its own ceiling would not be a ceiling.

The pool: a fee on profit, at claim#

fee = profit × r × (1 − d)

where profit is your gross payout minus your principal, r the class rate and d your tier discount at the moment you claim. Charged once, at claim, on profit only.

• A losing position pays nothing, because it has no profit.
• A winning position can never receive less than it put in, because the fee is at most 7% of the profit alone.
• There is no entry fee, and there cannot be one. With an entry fee, every winner in a lopsided pool — 97/3 is what a chain-metric market looks like a week before a near-certain outcome — would lose money on a winning position.

The discount is applied at your live tier when you claim. That is safe only because pool positions are not transferable.

Every ticket shows the fee three ways: in USDG, as a share of your position, and as a share of your maximum profit. The third is the honest one; a flat percentage looks broken near the extremes because it is.

The book: a fee on the taker, shaped by the price#

taker fee = C · r · p · (1 − p) · (1 − d), with C = 1

where p is the fill price as a probability. The kernel p(1 − p) is the variance of the outcome being transferred, so the fee is proportional to the risk actually transferred, and the fee as a share of maximum profit is r · p, which is at most r at every price.

A flat percentage of notional is forbidden for the mirror-image reason: at a 99c fill, a flat 50 basis points of notional would be 49.5% of the trader's maximum profit, and past 99.5c it would exceed the entire prize.

• Makers pay zero, in every class, always. Their tier benefit is a larger share of the rebate pool, not a discount on a fee of nothing.
• Makers are rebated from the taker fee their fill generated: 25% of the gross fee in classes A and B, 20% in class C, 15% in class D, and never more than the fee actually collected.
• The taker's signed fee cap makes a fill revert rather than exceed it, so a fill at a worse price than expected cannot charge a fee the taker never saw.
• The discount applied is the lower of the taker's tier discount when the order was signed and when it is filled.

At r = 2% and p = 0.5, the taker fee is 0.50% of notional.

Tier discounts#

See RINO token and tiers.

Other charges#

• Creating a market costs a creation fee (2 USDG at launch, governance-settable between 0 and 100) and a refundable bond that depends on the class. See Create from a template.
• Unlocking RINO early costs up to 5% of the amount, burned, not collected. See RINO token and tiers.
• Combos charge no protocol fee in version 1.
• Gas is paid to the chain for every transaction and is not a RINO fee.

Where fees go#

Pool fees and the protocol's share of book fees are sent to a fee router whose address is fixed at deployment and cannot be changed. Floor-division residue on a settled market — the fractions of a base unit that rounding leaves behind — may be swept to the router only after every claimant has had 180 days, and never any amount that is still owed to anyone.