💸Fees & Spread
Commission
Users will be charged commission when opening and closing positions. The commission rate is uniformly charged at 0.07%( Updated on July 17th).
For example, if a user opens a long ETH position with a margin of 100 USDT and 10x leverage, the opening commission is 100*10*0.07%=0.7USDT. When the user closes the position, the ETH price rises and the user's position becomes 1100 USDT. The closing commission still is 1000*0.07%=0.7USDT.
Execution Fee
There are two transactions involved in opening / closing a position:
User sends the first transaction to request open / close, include market / limit / TP/SL order.
keepers observe the blockchain for these requests then execute them.
The cost of the second transaction is displayed as the "Execution Fee". This network cost is paid to the blockchain network.
Funding Fee
Perpetual contracts of CEX use funding rates to balance the price deviation between perpetual contracts and spot to avoid the price of perpetual contracts deviating from the spot price excessively. KiloEx does not have this problem because it uses Oracle Price to calculate the user's opening and closing prices. However, there is another problem that under some market conditions, long and short positions are extremely imbalanced. Long-term imbalance will put Vault at risk. Therefore, funding rates are introduced to alleviate this situation. The funding rate is calculated based on the difference between the system's long and short positions. If long>short, the long position needs to pay the funding rate and the short position receives the funding rate, and vice versa.
In order to better address the issue of high net oi util leading to reduced available open positions for some tokens in a one-sided market, we have decided to cancel the borrowing fee and adjust the funding fee algorithm. This will allow some users to reduce their net oi util through funding farming during one-sided markets. The new funding fee will be calculated as follows:
funding fee = position size * funding_rate
The funding rate is calculated as the maximum absolute value among Binance, OKX, and Bybit’s funding rates, plus a 12% risk premium.
• For BTC and ETH, as blue-chip assets, the funding rate direction is determined by the overall net open interest (net OI) direction across the platform.
• For other tokens, the funding rate direction is determined by the net-OI direction of the specific token on KiloEx.
Borrowing Fee( Cancelled after April 25th, 2024)
Spread
Simulate the depth of transactions through a mechanism similar to the AMM of the spot DEX. The AMM parameters are set based on the depth of the entire trading market at the time of product listing of currency pair and can be adjusted according to changes in market depth afterwards.
Through the user's position and AMM parameters, the user's slippage can be calculated. The final transaction price can be calculated using the current oracle price and slippage
Introduced Close Spread: Enhances overall market stability and more closely reflects the behavior of order books. Closing spread is a function of the opposite order book depth.
New Protection Factor: Applied to close spreads for trades open less than 10 minutes and in positive PnL, directly targeting price manipulation. A more precise defense which allows improved spreads for organic trading.
Guaranteed Order Execution: Market or TPSL Orders are still triggered at the requested price, with fulfillment including the closing spread.
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