# Fee Structure

The following fee structure only applies to trading against the PEN native pool (PENLP pool). If a trader's position routes to a third-party underlying leveraged trading protocol through the PEN aggregator, the fee structure will adapt accordingly. Please check the Aggregator section and related underlying protocol docs for more details.

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## Position Fee

The PEN protocol charges position fees when traders open and close positions. The position fee is fixed at 0.08% and calculated as follows:

* Open Fee: 0.08% × Asset Price × Position Size
* Close Fee: 0.08% × Asset Price × Position Size

The collected position fees are allocated between external PENLP stakers, vePEN holders and POL. Please check Protocol Income Allocation for more details.

## Funding Payments

After traders borrow pooled assets for positions, the PEN protocol charges funding payments, which can be seen as borrowing fees from positions. The funding payment is collected every 8-hour. Long and short positions funding are calculated separately on PEN.

fundingFeeRate = max{utilization × limitRate, baseRate}

baseRate (Annualized)

* Long - ETH: 8%
* Long - BTC: 8%
* Long - ARB: 8%
* Long - BNB: 8%
* Long - AVAX: 8%
* Long - FTM: 8%
* Short: 8%

limitRate (Annualized)

* Long - ETH: 50%
* Long - BTC: 50%
* Long - ARB: 50%
* Long - BNB: 50%
* Long - AVAX: 50%
* Long - FTM: 50%
* Short: 60%

Utilization calculation examples:

* USDT utilization = global long USDT position / USDT in pool
* Short utilization = global short position / Stablecoins in pool

The collected funding fees are allocated between external PENLP stakers, vePEN holders and POL, the same as the collected position fee allocated. The baseRate and limitRate might change in the future as the PEN dev contributors makes continuous evaluations.

## Liquidation Fee

The maintenance margin (MM) on the PEN protocol is 0.5%, and the liquidation fee is 0.1%. Therefore, 0.1% (if it exists) margin will be collected as the fee when a position is liquidated. The remaining margin after liquidation will return to traders.

The liquidation fee will be shared between external PENLP stakers, vePEN holders and POL, the same as the collected position fee allocated.

## Spread

PEN offers 0% spreads under the USDT and BTC market. The spreads under USDT, AVAX and FTM markets are fixed at 0.12%.

* ETH: 0%
* BTC: 0%
* ARB: 0.03%
* BNB: 0.12%
* FTM: 0.12%
* AVAX: 0.15%
