📈DCNTRL Protocol Fees

Does DCNTRL Protocol impose any fees?

There's a one-time fee when USDEFI is borrowed and when USDEFI is redeemed:

1. For borrowers, a loan origination fee is applied as a percentage of the amount drawn (in USDEFI).

2. For redeemers, a redemption fee is charged on the amount paid to users by the system (in BNB) when exchanging USDEFI for BNB. It's important to note that redemption is different from repaying your loan as a borrower, which is free of cost.

Both fees are contingent on redemption volumes. They rise with each redemption based on the redeemed amount and decrease over time if no redemptions are made. This system is designed to moderate large redemptions with higher fees and control borrowing right after significant redemption volumes. The declining fee over time ensures that the charges for both borrowers and redeemers will "cool down" during periods of low redemption volumes.

The fees cannot drop below 0.5% (except in Crisis Mode), preventing the redemption facility from being exploited by arbitrageurs who could potentially front-run the price feed. The borrowing fee is capped at 5%, keeping the system appealing for borrowers even in stages where the money supply contracts due to redemptions.

Where does the Revenue Go?

Revenue is shared with DCNX stakers! To learn more about our revenue sharing model by checking it out here!