Fees
Position Fee
A fee equivalent to 0.01% of the position size will be applied when opening or closing a position.
Execution Fee
A fee equivalent to 0.000215 ETH will be charged on each request to open or close a position.
Borrowing Fee
The Borrowing Fee will be calculated at the beginning of every hour and deducted from collateral at the end. This fee, paid to liquidity providers as rewards, varies based on utilization and is calculated as (assets borrowed) / (total assets in the pool) * 0.005%. The liquidation price will be updated accordingly after each deduction. Please note that, regardless of whether it's a long or short position, USDC is the only token borrowed for accumulating borrowing fees.
Funding Fee
Funding fees serve to incentivize the equilibrium between long and short positions. The larger side, in terms of open interest, pays a funding fee to the side with smaller open interest. The funding fee will be charged from collateral every second while position remains open.
If your position accumulates positive funding fees, you can claim these fees effortlessly by using the "Claim" button under the "Claims" tab on the Trade page.
The funding fee for the larger side is calculated using the following formula:
The funding fee for the smaller side is calculated using the following formula:
Note that the fundingFactorPerSecond and the fundingExponentFactor are customized parameters.
To claim funding fee, user needs to first settle accumulated positive funding fees and then claim. This involves two on-chain transactions.
Swap Fee
Despite the reward bonus that incentivizes users to help balance the liquidity pool by adjusting the asset weight towards its target, the swap fee is also reduced (sometimes as low as 0) when the pool is more balanced. The protocol calculates the swap fee for both the pay token and the receive token separately. For each token, the protocol assesses whether the swap helps move the token weight towards the target weight. If it does, a discount will be applied to the fee for that token, potentially reducing it to 0. If it doesn’t, the protocol calculates the fee and compares it with the fee of the other token. The final fee will be the higher of the two. Please note that the actual swap fee is calculated in the unit of the receive token. However, for a unified user experience and better understanding, the fee is displayed in USDC.
For example: user A swaps DAI to USDT,
DAI Target Weight
20%
20%
20%
DAI Weight Change
18%->19%
18%->19%
21%->22%
DAI Fee
0.01 USDC
0.01 USDC
0.03 USDC
USDT Target Weight
20%
20%
20%
USDT Weight Change
22%->21%
19%->18%
19%->18%
USDT Fee
0.01 USDC
0.02 USDC
0.02 USDC
Final Swap Fee
0.01 USDC
0.02 USDC
0.03 USDC
Slippage
Slippage is the difference between the price a trader expects when opening a position and the actual execution price. This can occur due to a delay between transaction submission and confirmation on the blockchain, particularly during periods of high market volatility.
Gemnify operates as a Proactive Market Maker (PMM), offering the advantage of "zero price impact." In contrast, slippage in an Automated Market Maker (AMM) protocol arises due to its unique pricing mechanism, often based on the constant product formula x*y=k, and the liquidity available in the pool. When a trade is executed, this formula dynamically adjusts the price according to the trade's size relative to the pool’s liquidity. Large trades cause more significant shifts in token ratios, leading to higher slippage, while smaller trades in highly liquid pools experience minimal slippage. For traders, high slippage can result in receiving less than expected, resulting in a less favorable outcome.
Although Gemnify offers "zero price impact," slippage can still occur due to price fluctuations between the time a transaction is submitted and when it is confirmed on the blockchain. Traders can adjust the acceptable slippage tolerance in their account settings. For example, if the slippage tolerance is set to 0.3% and the DAI/USDC entry price is 1.0000, the execution will succeed as long as the price remains within the range of 0.9970 to 1.0030. If the price moves beyond this range, the transaction will fail. Setting the slippage tolerance too low can increase the likelihood of failed transactions.
Auto Closing
To better protect users' funds, if the price of a market fluctuates drastically and loses its peg to USDC—specifically, if the price moves outside the 0.96~1.04 range—the protocol will temporarily pause the market and automatically close all related user positions.
For example, if the DAI/USDC trading pair price suddenly drops to 0.95, falling below our lower threshold of 0.96, all users’ DAI positions will be closed (whether long or short and regardless of whether they are in profit or loss). The record of the order being automatically closed will be displayed in the Trading History under the 'Auto Close' type.
When an asset market is temporarily paused, the following actions are disabled:
Opening position on paused asset by market price
Opening position on paused asset by creating limit order
Swap involving the paused asset (either pay or receive)
Edit order of the paused asset
Edit position of the paused asset
Close position of the paused asset
Add liquidity of the paused asset
Things that users are still able to do:
Cancel limit order
Cancel TP/SL order
Remove liquidity
View trading history
Claim/settle funding
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