# Fees

<mark style="color:$info;">Multiply uses a simple, predictable fee model that aligns incentives across front-ends, credit partners, and Dimes. A leveraged position incurs two distinct categories of fees:</mark>

1. **Protocol fees**: <mark style="color:$info;">paid to Dimes, covering credit, hedging, and infrastructure.</mark>
2. **External fees:** <mark style="color:$info;">paid to the underlying prediction market (Polymarket) and front-end, independent of Multiply.</mark>

<mark style="color:$info;">Both are deducted from the position's collateral and netted against PnL at close. The sections below break down each in turn.</mark>

***

### 1. Protocol Fees

<mark style="color:$info;">Protocol fees compensate Dimes and credit partners for providing leverage, running hedges, and operating settlement infrastructure. They consist of an entry fee, a continuous time-based fee, and (only on forced closes) a liquidation fee.</mark>

#### Entry Fee

<mark style="color:$info;">A fixed percentage applied to</mark> <mark style="color:orange;">`Collateral × Leverage`</mark> <mark style="color:$info;">at position creation:</mark>

> <mark style="color:orange;">`EntryFee = Collateral × Leverage × f_entry`</mark>

<mark style="color:$info;">where</mark> **f\_entry** <mark style="color:$info;">is between 2.0% and 2.5%, scaled with leverage.</mark>

#### Time-Based Fee

<mark style="color:$info;">A funding-style fee applied continuously on the</mark> **protocol-provided capital** <mark style="color:$info;">(the borrowed portion of notional, i.e.</mark> <mark style="color:orange;">`Notional − Collateral`</mark><mark style="color:$info;">):</mark>

> <mark style="color:orange;">`TimeFee = BorrowedCapital × f_time × TimeElapsed`</mark>
>
> <mark style="color:orange;">`BorrowedCapital = Collateral × (Leverage − 1)`</mark>

<mark style="color:$info;">Where</mark> **f\_time** <mark style="color:$info;">is equivalent to</mark> **0.05% daily rate**<mark style="color:$info;">, charged continuously.</mark>

#### Liquidation Fee

<mark style="color:$info;">A 10% fee assessed on the</mark> **protocol-provided capital** (<mark style="color:orange;">`Notional − Collateral`</mark>) <mark style="color:$info;">when a position is force-closed. Retained entirely by Dimes to offset hedge slippage, execution impact, and emergency unwind costs.</mark>

#### Total Protocol Fee

> <mark style="color:orange;">`TotalProtocolFee = EntryFee + TimeFee (+ LiquidationFee, if applicable)`</mark>

***

### 2. External Fees (Polymarket and Front-ends)

<mark style="color:$info;">In addition to protocol fees, every position routed through Polymarket pays Polymarket's own</mark> **taker fee** <mark style="color:$info;">on the underlying CLOB trades. These fees are charged by Polymarket directly, are not collected or shared by Dimes, and apply to all market participants, leveraged or not. In addition, front-ends statutory execution fees also apply.</mark>

<mark style="color:$info;">Multiply surfaces the venue fee separately on every quote and position via the</mark> <mark style="color:orange;">`polymarket_trading_fee_bps`</mark> <mark style="color:$info;">field so that end users see the true cost footprint of opening and closing a leveraged trade.</mark>

#### How Polymarket Prices Fees

<mark style="color:$info;">Polymarket charges a per-share fee that varies with the share price. The formula is:</mark>

> <mark style="color:orange;">`fee_per_share = price × feeRate × (price × (1 − price))^exponent`</mark>

<mark style="color:$info;">Three properties of this curve matter:</mark>

* **Fees peak at $0.50 and decrease toward both extremes ($0.01 and $0.99).** <mark style="color:$info;">The</mark> <mark style="color:orange;">`price × (1 − price)`</mark> <mark style="color:$info;">term is the variance of a Bernoulli outcome: Polymarket charges takers in proportion to the adverse-selection risk that market makers bear at each price level.</mark>
* **Fees are charged on both entry and exit.** <mark style="color:$info;">Every position pays the fee twice: once when shares are bought and again when they are sold. The peak effective rates below describe one leg only: round-trip cost can approach double the headline rate, and traders should size leveraged positions with the full round-trip in mind.</mark>
* **Rates differ by market category.** <mark style="color:$info;">Under Polymarket's fee schedule effective March 30, 2026,</mark> **peak effective rates** <mark style="color:$info;">(the rate paid at $0.50, per leg) range from 0% to 1.80%:</mark>

| Category                           | Peak Effective Rate (per leg) | Approx. Round-Trip at 50¢ |
| ---------------------------------- | ----------------------------- | ------------------------- |
| Geopolitics                        | 0%                            | 0%                        |
| Sports                             | 0.75%                         | \~1.50%                   |
| Finance, Politics, Tech            | 1.00%                         | \~2.00%                   |
| Culture, Economics, Weather, Other | 1.25%                         | \~2.50%                   |
| Mentions                           | 1.56%                         | \~3.12%                   |
| Crypto                             | 1.80%                         | \~3.60%                   |

<mark style="color:$info;">Refer to</mark> [Polymarket's fee documentation](https://docs.polymarket.com/trading/fees) <mark style="color:$info;">for the canonical, up-to-date schedule and the exact formula coefficients (</mark><mark style="color:orange;">`feeRate`</mark><mark style="color:orange;">,</mark> <mark style="color:orange;">`exponent`</mark><mark style="color:$info;">) per category.</mark>

#### How Front-ends Prices Fees

<mark style="color:$info;">Front-end pricing approaches vary: some apply a gradual, price-dependent fee schedule similar to Polymarket's, others charge a flat origination fee, and some charge nothing at all. Front-end fees typically apply to Multiply positions in addition to venue and protocol fees, and are surfaced on every quote so users see the full cost stack before confirming.</mark>

#### How External Fees Scale With Leverage

**Exeternal fees are charged on the full leveraged notional, not on user collateral.**

<mark style="color:$info;">When a user opens a 10× position with $1,000 of collateral, $10,000 of shares are purchased on Polymarket, and Polymarket assesses fees on that $10,000, not on the $1,000 the user contributed. Fees are paid both at entry (buying shares) and at exit (selling shares), so the round-trip cost is paid twice.</mark>

<mark style="color:$info;">The practical consequence is that</mark> **the cost footprint of opening and closing a position is significantly larger, in absolute terms, than the unleveraged equivalent**, <mark style="color:$info;">even when no odds movement occurs. A position opened and closed at the same price still pays the full round-trip venue fee on the leveraged notional.</mark>

<mark style="color:$info;">Some practical implications:</mark>

* **Holding to resolution avoids the exit fee.** <mark style="color:$info;">Polymarket fees are taker fees on fills; resolution is not a fill. Users with high-conviction views who hold through resolution pay only the entry leg.</mark>
* **Trades that cross the 50¢ midpoint are most expensive.** <mark style="color:$info;">Fees are highest at $0.50 and fall symmetrically toward the extremes. A move from $0.05 to $0.15 incurs a lower round-trip fee than a move from $0.30 to $0.70 of the same absolute size.</mark>

***

### 3. Fee Flows

<mark style="color:$info;">Protocol fees flow entirely to Dimes, and are used to:</mark>

* <mark style="color:$info;">fund hedging operations and routing</mark>
* <mark style="color:$info;">pay interest to credit partners</mark>
* <mark style="color:$info;">support risk modeling, monitoring, and settlement infrastructure</mark>
* <mark style="color:$info;">maintain buffers and safety margins</mark>

<mark style="color:$info;">Front-end partners earn separately, by charging their own origination fee on the leveraged notional generated through their integration. The partner fee is configured in basis points on the partner record, applied at quote time on top of the protocol's origination fee, surfaced transparently to end users via</mark> <mark style="color:orange;">`partner_origination_fee_bps`</mark><mark style="color:$info;">, and settled directly to the partner's designated wallet. See</mark> [<mark style="color:$info;">Partner-Configurable Options</mark>](#id-4.-partner-configurable-options) <mark style="color:$info;">below for the full set of partner-level controls.</mark>

<mark style="color:$info;">Venue fees (Polymarket) are paid directly to Polymarket by the position and never flow through Dimes' or the partner's books.</mark>

***

### 4. Partner-Configurable Options

<mark style="color:$info;">Front-end partners can opt into several configuration options that customize how their integration earns and reports revenue. These are not exposed as self-serve settings. Dimes provisions them on the partner record during onboarding, so the API surface stays unchanged for end users.</mark>

* **Custom partner origination fee**: <mark style="color:$info;">partners may add an additional spread (in basis points) on top of the protocol's tier-based origination fee. The combined rate is enforced on-chain and surfaced through the standard</mark> <mark style="color:orange;">`origination_fee_bps`</mark> <mark style="color:$info;">field on every quote, offer, and position so end users always see the true blended rate before confirming. Offer and position responses (open + closed) expose the breakdown via</mark> <mark style="color:orange;">`protocol_origination_fee_bps`</mark> <mark style="color:$info;">/</mark> <mark style="color:orange;">`partner_origination_fee_bps`</mark> <mark style="color:$info;">— on positions, this split is frozen at offer creation, so positions opened before the field was persisted report</mark> <mark style="color:orange;">`partner_origination_fee_bps = 0`</mark> <mark style="color:$info;">and</mark> <mark style="color:orange;">`protocol_origination_fee_bps = origination_fee_bps`</mark><mark style="color:$info;">. The venue trading fee paid to the underlying prediction market on every executed leg (open, close, force-unwind, liquidate, settle) is surfaced separately on positions as</mark> <mark style="color:orange;">`accrued_venue_fee_*`</mark> <mark style="color:$info;">(open) and</mark> <mark style="color:orange;">`total_venue_fee_*`</mark> <mark style="color:$info;">(closed), and is now folded into</mark> <mark style="color:orange;">`net_unrealized_pnl_*`</mark> <mark style="color:$info;">and</mark> <mark style="color:orange;">`net_realized_pnl_*`</mark><mark style="color:$info;">.</mark>
* **Dedicated fee receiver wallet:** <mark style="color:$info;">partners designate a wallet that receives their share of fees. Settlement flows directly to that address, keeping accounting clean and removing any need for off-platform reconciliation.</mark>
* **Polymarket builder code:** <mark style="color:$info;">partners using the Polymarket route can register their own builder profile with Polymarket</mark> ([polymarket.com/settings?tab=builder](https://polymarket.com/settings?tab=builder)) <mark style="color:$info;">and share the returned</mark> <mark style="color:orange;">`bytes32`</mark> <mark style="color:$info;">builder code. Dimes attaches it to every CLOB order routed through that partner so Polymarket builder rewards accrue directly to the partner's Polymarket account, in addition to the partner's own origination fee on leveraged notional. Partners that don't provide a code fall back to the Dimes operator builder code.</mark>


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