The cost to open a position is 15% of the position size. Whenever a user opens a trade, Buffer contract mints an NFT token for the user and burns it at the time of closing. Based on the trading pool a %age of the fee collected is distributed to BLP holders and BFR stakers.
Buffer employs a "Dynamic Pricing" mechanism to incentivize or penalize traders, with the aim of maintaining balance in the Open Interest (OI) across various markets and promoting diversification among traders. This mechanism is intricately designed to impose higher fees during periods of market volatility. The fee is applicable to all trades and dynamically scales, influenced spread factor (C) for that market, trading volume, and payouts. As the iv, oi scales higher, a premium will be applied to top of the default settlement fees.
Based on the trading pool a %age of the fee collected is distributed to BLP holders and BFR stakers.
Placing Up/Down trades on Buffer incurs a flat fee for interactions with the Buffer keeper to compensate for the gas paid to the underlying blockchain while allowing for a 2x faster 1 Click trading experience.
Keeper fees are as follows:
- Placing an Up/Down trade: 0.1 USDC (flat)