Fee Structure

Bit Bank fees explained.

Bit Bank is built upon the $BNKD protocol. In order to enable the exchange of synthetic assets, an exchange fee is charged by BNKD whose fees are sent to the fee pool for $BNKD stakers to claim.

In addition to the exchange fee, a dynamic fee is in place which kicks in during times of high market volatility in order to neutralize front-running opportunities and protect stakers.

Exchange Fees

Exchange fees are charged when a trader opens or closes a trade through the Bit Bank platform. These fees are sent to the fee pool, where they are available to be claimed by BNKD stakers each week. Exchange fees may vary depending on a selected market & network. The most current fees are prominently displayed within the Bit Bank trading platform while trading or within these docs at Bit Bank.

Basis Points (BPS) are a unit of measurement equal to 1/100th of 1 percent commonly used in financial markets. Examples can be foud below. Find actual exchange fees within Bit Bank while trading.

Percentage	.bps
0.01%	1 bps
0.40%	40 bps

All fees are charged against the notional position size during order execution.

Cross-Margin Account Fees

Bit Bank fees are charged when a trader opens or closes a trade through the cross-margin contracts. Fees may vary. The most current fees will be displayed below & within the Bit Bank trading UI.

Current Bit Bank fees are sent to the Treasury until their use has been decided on through governance.

Order Type	Bit Bank Fee	Keeper Fee
Trade Fee	40bps	N/A
Limit	60bps	Dependent on network congestion (XDC)
Stop	60bps	Dependent on network congestion (XDC)

Example: Alice takes a position for $1000 xUSD on Cross Margin and submits a limit order. Alice will be charged 40bps for routing an order through Cross Margin Accounts and 60bps for the limit order, together she will be charged 100bps in Bit Bank fees for this trade. If Alice executes a market order through Cross Margin accounts, she will be charged 40bps in total.

Dynamic Fees

Dynamic exchange fees are additional fees paid by traders under volatile market conditions that neutralize front-running opportunities and protect stakers.

During periods of high volatility in the crypto markets, a dynamic fee will be levied upon trades to ensure that there are no front-running opportunities present for traders. Once market volatility subsidies, the dynamic exchange fee reverts to zero.

Dynamic fees will be prominently displayed on Bit Bank once levied.

During times of price instability, the dynamic fee is incremented higher according to observed volatility. So as volatility builds, it will accumulate in the dynamic fee. It also has a built-in decay factor, meaning that the dynamic fee will decay exponentially over time when volatility subsides.

Technical explanation on how dynamic fees work

At the beginning of each epoch, a dynamic fee gauge contract measures the asset oracle price change between epochs. If this difference is more than twice the prescribed deviation threshold (minimum frontrunnable threshold), the dynamic fee is increased by the size of the differential.

In the subsequent epoch, the dynamic fee is reduced by a decay factor but again subject to additional boosting if price movement between epochs exceeds prescribed thresholds.

For more technical information about dynamic exchange fees, refer directly to the