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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

  • Rollover Fees(Non crypto pairs) : For carrying positions in non-crypto pairs

Trading Fees

Maker/Taker Model

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

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

Trading fees are the same for both crypto and non-crypto pairs. BTC and ETH pairs currently have zero trading fees on Polynomial.

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

Rollover Fees (Non-Crypto Pairs)

The Rollover Fee applies only to non-crypto markets such as commodities, indices, metals, and forex. It reflects the cost of carrying open positions over time and compensates liquidity providers (LPs) for providing liquidity when underlying markets are closed or volatile.

  • Applies to both long and short positions equally

  • Non-zero-sum: unlike funding fees (which flow between longs and shorts), this fee is paid by traders into the protocol and distributed to LPs

  • Accrues continuously and is realized when the position is closed

You can view this directly in the UI under “Interest Rate”

Example

If the annualized rollover rate is 10% for GOLD, a $10,000 position held for one day incurs approximately $2.74, which is automatically deducted from your PnL when the position is closed.

Current Rollover Fee Rates

Market
Annual Rate

XAU

10%

XAG

10%

WTI

10%

SPY

5%

DIA

5%

QQQ

5%

USD/JPY

5%

EUR/USD

5%

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

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