Fees & Costs

This page is the canonical source of truth for Parquet’s fee and risk parameters. Where other pages (the glossary, FAQ, or Contracts) restate a number, this table is authoritative.

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Fee & risk parameters at a glance

The remaining sections explain each of these in more detail.

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Position fees

A fee is charged when you open or close a position. The fee is calculated as a percentage of the position size. Each market has a base fee rate applied to all trades. Markets also support a favorable fee rate — a lower rate applied to trades that reduce the open interest imbalance between longs and shorts. This incentivizes balanced open interest across the protocol. The same logic applies in reverse for short positions. When favorable fees are not configured for a market, the base rate is used for all trades.

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Funding rate

The funding rate is a periodic payment between long and short position holders, based on the open interest imbalance.

• The side with larger aggregate open interest pays the other side — and the lighter side receives funding.
• Funding accrues continuously and is settled when you close or modify your position.
• The funding rate is updated automatically at regular intervals.
• The funding rate is capped at 300% APR (≈0.82% per day), enforced on-chain.

Funding incentivizes balanced open interest: when one side dominates, its holders pay a premium to the other side. Because the rate is capped, the cost of holding even a heavily one-sided position is bounded — funding can never spiral, no matter how crowded a market gets.

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Borrowing fees

Borrowing fees are a time-based cost proportional to your position size and pool utilization. They accrue continuously from the moment you open a position until you close it. Borrowing fees are charged on position close, margin update, or liquidation.

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Fee distribution

All fees flow through a multi-step distribution process:

1. Accrue — Each trade splits the fee at the pool level. The LP share goes to liquidity providers (increasing the value of their LP tokens). The remainder accumulates as pending non-LP fees.
2. Distribute — The remaining collected fees are periodically distributed to stakers, the treasury, and the referral reward pool.

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Deposit and withdrawal fees

The liquidity pool may charge a fee on deposits and withdrawals. When applicable, the fee is deducted before LP tokens are minted (on deposit) or before USDC is returned (on withdrawal).

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Minimum collateral

Positions require a minimum of $10 USDC collateral. This applies when opening a position, creating an increase order, partially closing a position (remaining collateral must stay above$10), and removing margin.