DeFiChain Fees

A comprehensive list of fees you may encounter on DeFiChain

As there is no funding for DeFiChain as a decentralized project, fees support the network. Here we will list details about any fees you may find on DeFiChain.

This page was last updated on 22 April 2023.

Transaction Fee

Interactions with the network will require a fee, paid to the masternodes for their service of processing the transaction for you. These fees are minimal, as of October 2022, a transaction fee is around 0.000005 DFI (fractions of a cent). Transaction fees are present across the major blockchains of crypto, so this should not come as a surprise.

Swapping Fees

Depending on what you are swapping, you may have more or less fees that need to be paid in the transaction.

Price Impact

Price impact is caused on every swap, with every trade you move the price of the coins, even if only a little bit. There is a formula for the price impact:

If you are swapping x coin A for coin B, the amount of coin B, y, that you will get is:

where

x is how much coin A is in the LP

△x is how much coin A you will send

y is how much coin B is in the LP

△y is how much coin B you will receive

k is the product of the amount of coin A and coin B

Liquidity Provider Fee

Liquidity miners fund liquidity pools so that investors can swap in between tokens. In return for providing liquidity and the risk they take in doing so, they take a 0.2% fee per swap, which can be calculated by looking at the liquidity provider fee shown compared to the amount being swapped.

Specific Pool Fees

Certain pools have additional fees, in order to help manage supply of the token. There are three fees that may apply:

1. There is a 0.1% fee on the dBTC-DFI pool, when buying or selling. The fee is converted to dBTC and burned. The fee was implemented as a means to recover a collateral of 1 BTC per dBTC, as an additional supply of dBTC was minted due to an exploit.

2. There is a DEX Stabilization fee that applies to swaps involving DUSD and DFI, dUSDC, or dUSDT. In the best interest of the community, the fee is set by the Ticker Council (view their Twitter here) to 30%, decreasing by 0.5% (0.5% of 100%, not of 30%) every day a DUSD pool has a price of $1 that is maintained for more than 2,880 blocks, and 1% for every day the algorithmic ratio of DUSD is below 50%.

Future Swap Fees

A future swap is not like a traditional pool swap you find on the DEX or elsewhere in the crypto ecosystem. It allows you to buy dTokens for a 5% premium (fee) to the oracle/real price or sell dTokens for a 5% discount (fee) to the oracle price, at a predetermined block. In order to fulfill your order, the system burns and mints tokens. If you are buying dTokens, you mint new dTokens and will burn DUSD. Conversely, you mint DUSD and burn dTokens if you open an order to sell dTokens.

Vault Fees

Vaults, your own personal bank, have different fees that may be charged.

Opening/Closing Fee

When you open a vault, you must pay a fee of 2 DFI + the normal transaction fee. 1 DFI is burnt, but the other DFI is returned to you when you close your vault. Open and close vaults with caution so you do not have to pay unnecessary fees.

Vault Interest

When taking out a loan, depending on how much collateral is required for the loan, you will pay a certain APR on the loan. The current loan structures and their respective interest are:

1. 150% minimum collateralization ratio, 5% APR

2. 175% minimum collateralization ratio, 3% APR

3. 200% minimum collateralization ratio, 2% APR

4. 350% minimum collateralization ratio, 1.5% APR

5. 500% minimum collateralization ratio, 1% APR

6. 1,000% minimum collateralization ratio, 0.5% APR

The interest is compounded per block and assumes that the per block time is 30 seconds. In other words, whether a block takes a couple seconds or a couple minutes, interest will be added to the loan based on the assumption that 30 seconds has passed. Vault interest helps pay back algorithmic tokens as well as support the general well-being of the ecosystem.

Note: For DUSD, there is a negative interest rate applied. According to the proposal (DFIP-2208-A):

"The payout should be "simulated" via negative interest rates on DUSD loans (possible in v3). With DEXFee30 being the paid DEX-stabilization-fee from the last 30 days and DUSDLoans being the maximum amount of DUSD loans in the last 24 hours, the negative interest should be calculated as

negInterest = (DEXFee30 * 0.5 * 12.16) / DUSDLoans

The negInterest should be updated every day at the same block as the DEXFee is updated right now. Also the same procedure as the DEX-fee (announcing one day in advance of the new value)

For the first 7 days after activation the used DEXFee30 should be set to max(3 500 000, DEXFee30). This is because we burned 3.5 mio DUSD in the 30 days before August 12th and this makes the effects in the first week after activation predictable.

For day 8-14 after activation the used DEXFee30 should be set to max(DEXFee30, 3500000 * (14-day)/6 + DEXFee30*(day-8)/6) to smooth out the transition between the initial payout and the actual DEXFee in case the first weeks effects already lead to a strongly reduced DEXFee and/or DUSD burn."

Vault Liquidation Fee

When your vault is liquidated there is a 5% penalty on the collateral amount. For example, if you have taken a loan of 1,000 dARKK and have been liquidated, the system will set a minimum bid of 1,050 dARKK (1,000 * 105%), disincentivizing users. If they want to retrieve their collateral by bidding and having to outbid everyone else, they will lose 50 dARKK to the liquidation penalty, which is converted to DUSD and burned.

Other Types of Fees

There are various other fees that you may find while interacting with the DeFiChain network. They come from features such as masternode creation and proposal creations.

Masternode Creation Fee

When creating a masternode, in addition to the 20,000 DFI you are required to stake, you must pay an additional 11 DFI fee, which is burned. This way, users are disincentivized from staking and unstaking their DFI repeatedly.

Proposal Fees

Depending on what proposal is being submitted, a different amount of DFI is paid. For Community Funded Improvement Proposals (CFIPs) the fee is 10 DFI or 1% of the amount being requested, whichever is greater. For DeFiChain Improvement Proposals (DFIPs) the fee is 50 DFI, except for a DFIP to reallocate block rewards, which has a fee of 500 DFI. A proposal is then validated with a TXID that shows the transaction of the fees to the burn address (8defichainBurnAddressXXXXXXXdRQkSm).

Custom Token Fee

You can create your own DeFiChain tokens on the blockchain. In fact, there are a number of them right now. You'll have to pay 101 DFI, refunded when you destroy/return all of the tokens.

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