KTX.Finance Innovative Dynamic Fees
Since inception, KTX.Finance (KayTeeX) has been using a fixed trading fee for both the opening and closing of the perpetual trade position size that is consistent with the current standard in the competitive Decentralized Exchange landscape.
GMX and her forks are collecting fees of 0.10% on traders’ total perpetual trade position size for opening and then closing except for Mycelium that is collecting 0.09% instead. GNS and MUX on the other hand are collecting 0.08% for both the opening and closing fees. Uniswap V3 offers Liquidity Providers three separate fee tiers per paid — 0.05%, 0.3% and 1.00% and this array of options ensures that LPs tailor their margins according to expected pair volatility.
KTX.Finance believes that we should not be competing with other protocols by lowering fees. Instead, we are implementing a new concept of “Dynamic Fees”
The significance of the Trading Fees
The trading fees is charged upon opening / increasing and decreasing / closing a position.
Let’s consider a simple example of how the fee on opening / increasing a position will be calculated using the fixed fee of 0.1%.
Suppose trader Peter wants to use 100 USDT with x10 leverage to go long BNB/BUSD. The opening fee of 0.1% will be calculated considering the leverage and will be 100*10*0.1/100 = 1 BUSD. Thus, the collateral for Alex’s open position will be 100–1 = 99 BUSD, and the total position size will be 99*10 = 990 BUSD.
Assuming that trader Peter decides to close the above order after a 10% profit, the closing fee of 0.1% will be calculated as 990*1.10*0.1/100 = 1.089 BUSD
Introducing Dynamic Fees for Opening and Closing orders
It is our goal to continually provide value to our users. This is why KTX.Finance has introduced the dynamic fee curve into our opening and closing fees which will be based on underlying asset utilization (Open Interest/AUM).
The dynamic curve aims incentivise traders to trade during times of low Open Interest. This helps to ensure the normalization of trading volume and increase yield for LPs. This design has been studied and iterated to both reduce the risks of the protocol while remaining attractive and beneficial to traders. In the curve above, different variables (R0, R1, R2) will be customizable by $KTC token holders in the future.
Summary
KTX.Finance innovative dynamic fees provides incentives for traders to trade during times of low Open Interest. By opening positions with lower fees, traders have a higher chance of profit!
This helps form new types of trading strategies and also proves to be the lowest in fees among the other Decentralized Exchangers. This improvement propels KTX.Finance to be a very competitive product that is suitable for both traders and liquidity providers.
KTX.Finance is running the Testnet right now and everyone is welcomed to participate in the testnet. Your feedback is greatly appreciated and let us create the best perpetuals DEX together
Connect with KTX.Finance
- Website: https://www.ktx.finance
- Twitter: https://twitter.com/KTX_finance
- Telegram: https://t.me/KTX_officials
- Discord: https://discord.gg/zwWnGEUWUy
- Deck: https://docsend.com/view/j9wd585trjrb8kni
- Doc: https://docs.ktx.finance/
