Rewards & Fees
OCTANE token usage and flow are design to be a self-sustaining ecosystem.
Instead of saying no fees and then charging based on positive slippage, we charge a direct transaction fee to better serve the limit order at the desired price and pass on any price benefits back to the user.
The trading fee is charged based on network conditions & order size (detailed fee structure to be posted before mainnet). These fees are paid by the user in trade source token or in OCTANE token. Paying in OCTANE token provides up to a 50% discount on trading fees.
Trading fees are kept to be incentive-driven for the executors, who pay the gas fee while executing transactions, while fees will still be reasonable for the user. Fees can take any value, but we propose that the fee is roughly equal to the cost to fill the limit order by executors.
A portion of trading fees paid by the user is given to the network of executors. Executors pay the gas fee for the order execution in return for the fee incentives.
A portion of the trading fee is taken by the protocol. Protocol fees will be transferred to the DAO treasury for direct usage to benefit protocol users with features like insurance, increase executor incentives to cover gas fees, protocol development, and more based on DAO calls. Protocol fee is discounted from trading fees if trading fees are paid in OCTANE tokens.
Initially, these fees will be primarily used for development and growth, but eventually, these will be distributed to OCTANE token staking pools.
APY generated on the limit order assets are given back to the user after a portion of it is taken by the protocol as a lending fee (detailed fee structure to be posted before mainnet).
50% of protocol lending fees are kept in DAO treasury to directly benefit the protocol users (same as protocol fees) and the rest 50% will be sent to a burn address to burn those OCTANE tokens.
Users can get APY rewards in the source token or OCTANE token, but the incentives of receiving rewards in form of OCTANE tokens will always be greater.
AMM fees vary based on the AMM used, usually, it is ~0.3% of the order value.