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protocol fee graphic
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vgantchev committed Jan 24, 2024
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4 changes: 4 additions & 0 deletions docs/fees.md
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Expand Up @@ -47,6 +47,10 @@ Protocol fees are paid by users whenever they make a trade in the Omnipool. Thes

When there is no negative imbalance, the protocol fee will be redirected to the HDX pool within the Omnipool. This will result in the value of HDX increasing relative to all other assets in the Omnipool. An arbitrageur will observe this and swap HDX with other assets, setting a new (likely higher) price for HDX.

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<img alt="metadata" src={useBaseUrl('/fees/protocol_fee.png')} width="800px" />
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## Withdrawal fee (Omnipool)
The withdrawal fee is a dynamic fee paid whenever users withdraws liquidity from the Omnipool. It is designed to ensure that LPs do not lose money when liquidity is withdrawn immediately after a price change. The fee is calculated as the percentage difference between the spot price and the oracle price. This is also designed to ensure that any potential manipulation of the spot price will not be profitable.

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2 changes: 1 addition & 1 deletion docs/omnipool_impermanent_loss.md
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Expand Up @@ -121,4 +121,4 @@ In the second place, HydraDX owns a substantial amount of Protocol-owned liquidi

Finally, the HydraDX Protocol has put some liquidity restrictions in place. One such restriction is to make **LRNA unvailable for purchase** on the market. The only way to obtain LRNA is to receive it as partial compensation for the IL experienced by LPing. This is meant to cap the total amount of LRNA that could leave the Omnipool, and therefore limit how much LRNA could suddenly be sold back to the Omnipool.

Asset caps are another type of liquidity restriction. Asset caps are defined per asset and they ensure that any token cannot make up a greater proportion of the Omnipool than initially defined by the cap.
Asset caps are another type of liquidity restriction. Asset caps are defined per asset and they ensure that any token cannot make up a greater proportion of the Omnipool than initially defined by the cap.
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