4️⃣Fees in Perpetual Trading

4.1.Funding Fee

The funding fee $\gamma_f$ in Roguex is a periodic fee that users incur when they open leveraged positions on the platform. Leveraged trading allows users to amplify their trading positions by borrowing additional assets, which can lead to potentially higher profits but also carries increased risk. To enable leverage, users borrow assets from the swap pool to increase their position size.

The funding fee is charged on an hourly basis. It represents the cost of borrowing these assets to maintain a leveraged position. Charging a funding fee helps Roguex manage risk and incentivizes users to close their leveraged positions if they are not actively trading or if their positions are unprofitable.

Funding fees can vary depending on the supply and demand dynamics of the platform. The goal is to balance the fees paid by long and short position holders to maintain a fair and stable trading environment and are intended to encourage responsible trading practices and to ensure that users do not over-leverage their positions.

Overall, the funding fee in Roguex plays a crucial role in managing leverage, encouraging responsible trading practices, and helping to ensure the platform's long-term sustainability. Users should be aware of these fees and consider them as part of their trading strategy when engaging in leveraged trading on Roguex. The funding is calculated as:

$\gamma_f = s \cdot \Gamma_\text{fBase} \cdot \frac{\text{liq}_\text{resv}}{\text{liq}_\text{total}}$ (3)

where $s$ is perpetual trading position size user open, $\Gamma_\text{fBase}$ is funding fee basis point and $\text{liq}_\text{resv}$, $\text{liq}_\text{total}$ are liquidity reserved and total liquidity respectively.

4.2.Position Fee

The position fee $\gamma_p$ in Roguex is a fee that users incur when they open a trading position on the platform. Unlike the funding fee which is charged periodically the position fee is a one-time charge that occurs at the moment a user opens a position. The position fee is only applied once when a user initiates a trading position. It is not subject to recurring charges during the holding period of the position.

Users pay the position fee as part of the cost associated with opening a trading position, whether it's a long (buy) or short (sell) position.

The position fee contributes to the platform's revenue and sustainability. It helps support the infrastructure, development, and maintenance of the Roguex ecosystem.

$\gamma_p = s \cdot \Gamma_\text{pBase}$ (4)

where $s$ is perpetual trading position size user open, $\Gamma_\text{pBase}$ is position fee basis point.

3.3.Premium Fee

The premium fee $\gamma_r$ in Roguex is a fee that comes into play when there is an imbalance between long and short positions in a particular trading pair. When one side of the market has a significantly larger position compared to the other side, the side with the larger position is required to pay a premium fee to the side with the smaller position.

The premium fee is designed to incentivize traders to help correct position imbalances in the market. It encourages traders with larger positions to offset their positions or make payments to traders with smaller positions. It discourages extreme position imbalances that could disrupt the market.

Roguex employs the premium fee as a mechanism to prevent excessive concentration of positions and promote a more stable and efficient trading environment. The premium fee is typically triggered when the position size disparity reaches a predefined threshold, indicating a significant imbalance that requires correction.

Overall, the premium fee in Roguex serves as a mechanism to encourage balance and fairness in the market by penalizing traders with disproportionately large positions and rewarding those with smaller positions. It contributes to the stability and integrity of the Roguex trading platform.