> ## Documentation Index
> Fetch the complete documentation index at: https://docs.orica.markets/llms.txt
> Use this file to discover all available pages before exploring further.

# Fees

> Understanding the fee structure on Orica.

Orica charges fees on trading activity and redemptions. These fees sustain the protocol and reward market creators.

***

## Fee Overview

| Fee Type | Recipient | Rate | When Charged |
| - | - | - | - |
| Authority Trading Fee | Protocol | 1.25% | On buy/sell |
| Creator Trading Fee | Market Creator | 0.45% | On buy/sell |
| Redemption Fee | Protocol | 0.30% | On redeem |

***

## Trading Fees

Every buy and sell transaction incurs a combined 1.70% fee:

> [tab] Buying
>
> Fees are deducted from your input amount:
>
> ```
> Input: 100 USDC
> Protocol Fee (1.25%): 1.25 USDC
> Creator Fee (0.45%): 0.45 USDC
> Amount for shares: 98.30 USDC
> ```
>
> You receive shares worth \~98.30 USDC at current prices.

> [tab] Selling
>
> Fees are deducted from your output amount:
>
> ```
> Share value: 100 USDC
> Protocol Fee (1.25%): 1.25 USDC
> Creator Fee (0.45%): 0.45 USDC
> USDC received: 98.30 USDC
> ```

***

## Redemption Fee

When you redeem winning shares after resolution, a 0.30% fee applies:

```
Winning shares: 1000
Gross value: 1000 USDC
Redemption Fee (0.30%): 3.00 USDC
Net payout: 997.00 USDC
```

> [!NOTE]
>
> Losing shares have no value and cannot be redeemed.

***

## Fee Destinations

### Protocol Fee Vault

Protocol fees accumulate in a fee vault controlled by the protocol authority. These funds support:

* Infrastructure costs
* Development
* Protocol improvements

### Creator Fee Vault

Each market has a designated creator fee vault. Market creators earn passive income from trading activity on their markets.

***

## Fetching Current Fees

Fee rates are stored in the GlobalState account and can be fetched via SDK:

```typescript theme={"dark"}
const globalState = await sdk.orica.fetchGlobalState();

console.log("Trading Fee (Protocol):", globalState.authorityTradingFeeBps, "bps");
console.log("Trading Fee (Creator):", globalState.creatorTradingFeeBps, "bps");
console.log("Redemption Fee:", globalState.redemptionFeeBps, "bps");
```

> [!WARNING]
>
> Fee rates are expressed in basis points (bps). 100 bps = 1%.

***

## Fee Considerations for Traders

> [card] Round-Trip Cost
>
> Buying and selling incurs fees twice. A round trip costs \~3.40% plus any price movement.

> [card] Break-Even
>
> You need prices to move \~3.70% in your favor to break even on a round trip (including redemption).

> [card] Long-Term Holding
>
> Holding until resolution means you only pay fees once (buy) plus redemption fee if you win.

> [card] Large Trades
>
> Fees scale linearly with trade size. A 1000 USDC trade pays 10x the fees of a 100 USDC trade.

***

## Fee Changes

Fee rates can be updated by protocol governance. Changes take effect immediately for new transactions. Always fetch current rates before large trades:

```typescript theme={"dark"}
// Verify current fees before trading
const globalState = await sdk.orica.fetchGlobalState();
const totalTradingFee = 
  globalState.authorityTradingFeeBps + 
  globalState.creatorTradingFeeBps;

console.log(`Total trading fee: ${totalTradingFee / 100}%`);
```


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