Trading Fees

Fee Types

• Trading Fees: Fees for opening and closing positions

• Funding Fees: Fees for holding positions (based on funding velocity)

• Liquidation Fees: Fees for liquidated positions

Trading Fees

Maker/Taker Model

• Maker Fees: Fees for providing liquidity (limit orders)

• Taker Fees: Fees for taking liquidity (market orders)

Skew-Based Pricing

Trading prices include a premium/discount based on market skew to manage risk and create rebalancing incentives:

• Premium for Long Skew: When long positions exceed short positions, prices include a premium

• Discount for Short Skew: When short positions exceed long positions, prices include a discount

• Linear Pricing Function: premium = skew / skewScale

• Execution Price: Average price along the premium/discount curve

• Risk Management: Creates soft limits on maximum exposure without restrictive open interest limits

Fee Schedule

VIP Tier	Maker Fee	Taker Fee	Requirements
Standard	0.04%	0.06%	Default tier
VIP 1	0.025%	0.0525%	$1M+ trading volume
VIP 2	0.0225%	0.05%	$2.5M+ trading volume
VIP 3	0.02%	0.045%	$5.0M+ trading volume
VIP 4	0.0175%	0.04%	$10M+ trading volume
VIP 5	0.015%	0.035%	$25M+ trading volume
VIP 6	0.0125%	0.03%	$50M+ trading volume
VIP 7	0.01%	0.025%	$100M+ trading volume
VIP 8	0.005%	0.02%	$250M+ trading volume
VIP 9	0.00%	0.015%	$500M+ trading volume

Funding Rate

Funding fees use a velocity-based model that creates smooth, predictable funding rate trajectories while maintaining zero-sum properties.

Funding Rate Velocity Model

Instead of instantaneous funding rates proportional to skew, the system uses funding rate velocity where:

• dr/dt = c × skew (rate of change in funding rates)

• Funding rates continuously drift higher/lower with uncorrected position imbalances

• Creates natural price discovery for funding rates

• Smooths funding rate trajectories for better UX

Key Factors

• Market Skew: Imbalance between long and short positions

• Funding Velocity: Rate of change in funding rates (not instantaneous rates)

• Skew Scale: Configurable parameter that modulates market liquidity

• Max Funding Velocity: Maximum funding rate velocity when skew = skewScale

How It Works

1. Unbalanced Positions: When long/short positions are imbalanced, funding rate velocity increases

2. Continuous Drift: Funding rates drift continuously until positions rebalance

3. Zero-Sum: LPs neither gain nor lose funding over time - funding flows through them

4. Natural Rebalancing: Creates incentives for market participants to balance positions

Liquidation Fees

• Base Fee: 50$ fixed fee for liquidation

• Market Impact: Additional fee based on market impact

• Gas Costs: Gas costs for liquidation transaction

Bridge Fees

Bridge fees vary by destination chain and current network conditions.

VIP Program

VIP tiers are based on 30-day trading volume and provide:

• Reduced Fees: Lower trading fees

• Priority Support: Priority customer support

• Exclusive Events: Invitation to exclusive events

VIP Requirements

• Trading Volume: Based on 30-day trading volume

• Account Balance: Minimum account balance requirements

• Activity Level: Regular trading activity

• Compliance: Compliance with platform terms

VIP Tier Progression

// VIP tier calculation
function calculateVIPTier(tradingVolume: number) {
  if (tradingVolume >= 1000000) return 'VIP 5';
  if (tradingVolume >= 500000) return 'VIP 4';
  if (tradingVolume >= 100000) return 'VIP 3';
  if (tradingVolume >= 50000) return 'VIP 2';
  if (tradingVolume >= 10000) return 'VIP 1';
  return 'Standard';
}

Fee Optimization

Reducing Trading Fees

• Use Limit Orders: Use limit orders to get maker fees

• VIP Program: Participate in VIP program

• Volume Trading: Increase trading volume for better rates

• Batch Orders: Batch multiple orders together

Reducing Funding Fees

• Market Timing: Time entries to minimize funding costs

• Position Management: Manage position sizes and timing

• Funding Rate Monitoring: Monitor funding rate trends

• Arbitrage Opportunities: Use funding rate arbitrage

Reducing Withdrawal Fees

• Choose Optimal Chains: Choose chains with lower fees

• Batch Withdrawals: Batch multiple withdrawals

• Timing: Withdraw during low gas periods

• Alternative Methods: Use alternative withdrawal methods

Fee Transparency

Fee Display

• Pre-trade: Fees displayed before trade execution

• Post-trade: Fees shown in trade confirmation

• Account History: All fees tracked in account history

• Real-time Updates: Fees update in real-time

Fee Breakdown

• Trading Fees: Clearly separated from other fees

• Funding Fees: Shown separately from trading fees

• Total Costs: Total cost breakdown provided

• Fee History: Historical fee data available

Fee Comparison

Competitive Analysis

Exchange	Maker Fee	Taker Fee	Funding Fee
Polynomial	0.02%	0.05%	Variable
Binance	0.02%	0.04%	0.01%
Bybit	0.01%	0.06%	0.01%
dYdX	0.00%	0.05%	0.00%

Value Proposition

• Competitive Rates: Competitive with major exchanges

• Transparent Pricing: Clear and transparent fee structure

• VIP Benefits: Additional benefits through VIP program

• No Hidden Fees: No hidden or surprise fees

f98d57c (Update documentation based on Discord feedback)

Fee Payment

• Automatic Deduction: Fees automatically deducted from account balance

• USDC Payment: All fees paid in USDC

• Real-time Processing: Fees processed immediately upon trade execution

Price Feeds

Polynomial uses Pyth Network for price feeds, providing:

• High-Frequency Updates: Real-time price updates for accurate execution

• Decentralized Oracle Network: Multiple data sources for reliability

• Low Latency: Fast price updates to minimize slippage

• On-Chain Verification: Price updates verified on-chain for security

Important Notes

• Fees are subject to change based on market conditions

• VIP benefits may be updated over time

• Always check current fee rates before trading

• All fees are displayed before trade execution for transparency

• Skew-based pricing and funding velocity parameters are configurable via governancentinuebort