Withdrawal Fee

“Withdrawal Arbitrage” is able to drain fund from the pool and is harmful to the protocol’s long term financial health. To counter the attacks, we have devised our own withdrawal fees mechanism.

In most cases, however, a very small withdrawal fee is already sufficient to prevent such an attack.

When the withdrawal amount is equal to 1% of the liability:

Cov RatioWithdrawal Fee*

>= 1

-0.0000%

0.9

-0.0011%

0.8

-0.0093%

0.7

-0.0518%

0.6

-0.2731%

0.5

-1.6127%

0.4

-12.41%

<= 0.3

-100%

*Assuming k=0.00002 and n=7, which is the main pool configuration

You can learn more about withdrawal arbitrage and our design on withdrawal fee here.

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