Fees

Overview

There are 4 different fees the user should know about.

1. Inbound Fee (sourceChain: gasRate * txSize)
2. Affiliate Fee (affiliateFee * swapAmount)
3. Liquidity Fee (swapSlip * swapAmount)
4. Outbound Fee (destinationChain: gasRate * txSize)

Terms

• SourceChain: the chain the user is swapping from
• DestinationChain: the chain the user is swapping to txSize: the size of the transaction in bytes (or units)
• gasRate: the current gas rate of the external network
• swapAmount: the amount the user is swapping swapSlip: the slip created by the
• swapAmount, as a function of poolDepth
• affiliateFee: optional fee set by interface in basis points

Fees Details

Inbound Fee

This is the fee the user pays to make a transaction on the source chain, which the user pays directly themselves. The gas rate recommended to use is fast where the tx is guaranteed to be committed in the next block. Any longer and the user will be waiting a long time for their swap and their price will be invalid (thus they may get an unnecessary refund).

$$inboundFee=txSize\ast gasRate$$

Liquidity Fee

This is simply the slip created by the transaction multiplied by its amount. It is priced and deducted from the destination amount automatically by the protocol.

$$slip=\frac{swapAmount}{swapAmount+poolDepth}$$

$$fee=slip\ast swapAmount$$

See more information in the [Liquidity Section]

Affiliate Fee

Within the transactions you build for your users you can include an affiliate for your exchange.

• Affiliate fees are possible for: swaps, saving despoit, lending addition, RUNEPool withdrawal.
• The affiliate fee is in basis points (0-10,000) and will be deducted from the inbound or outbound transaction amount.
• A THORName is required to collect affiliate address. See a guide on creating THORNames here.
• Affiliates are paid in $RUNE by default however a preferred asset can be specified within the THORName.

$$affliateFee=\frac{feeInBasisPoints\ast txAmount}{10000}$$

Affiliate Fee Taking Process

• If the inbound swap asset is a native THORChain asset ($RUNE, synth or trade asset) the affiliate fee amount will be deducted directly from the transaction amount.
• If the inbound swap asset is on any other chain the network will submit a swap to $RUNE with the destination address as your affiliate fee address.
• If the affiliate is added to an ADDLP tx, then the affiliate is included in the network as an LP.
• If the affiliate is added as a lending or a savers deposit, it is taken from the transaction amount.
• If the affiliate is added as a RUNEPool withdraw, it is deducted from the profit amount (positive PnL), not the principle.

Read https://medium.com/thorchain/affiliate-fees-on-thorchain-17cbc176a11b for more information.

Preferred Asset for Affiliate Fees

Affiliates can collect their fees in the asset of their choice (choosing from the assets that have a pool on THORChain). In order to collect fees in a preferred asset, affiliates must use a THORName in the memos.

Multiple Affiliates

Interfaces can define up to (set by MultipleAffiliatesMaxCount) valid affiliate and affiliate basis points pairs in a swap memo and the network will attempt to skim an affiliate fee for each. Alternatively, up to 5 valid affiliates and exactly one valid basis points can be defined, and the network will attempt to skim the same basis points fee for each affiliate.

Valid memo examples:

• =:ETH.ETH:0x3021c479f7f8c9f1d5c7d8523ba5e22c0bcb5430::t1/t2/t3/t4/t5:10 (Will skim 10 basis points for each of the affiliates)
• =:ETH.ETH:0x3021c479f7f8c9f1d5c7d8523ba5e22c0bcb5430::t1/thor1t2hav42urasnsvwa6x6fyezaex9f953plh72pq/t3:10/20/30 (Will skim 10 basis points for t1, 20 basis points for thor1t2hav42urasnsvwa6x6fyezaex9f953plh72pq, and 30 basis points for t3)

Invalid memo examples:

• =:ETH.ETH:0x3021c479f7f8c9f1d5c7d8523ba5e22c0bcb5430::t1/t2/t3/t4/t5:10/20 (5 affiliates defined, but only 2 affiliate basis points)
• =:ETH.ETH:0x3021c479f7f8c9f1d5c7d8523ba5e22c0bcb5430::t1/t2/t3/t4/t5/t6:10 (Too many affiliates defined)

How it Works

If an affiliate's THORName has the proper preferred asset configuration set, the network will begin collecting their affiliate fees in $RUNE in the AffiliateCollector module. Once the accrued RUNE in the module is greater than PreferredAssetOutboundFeeMultiplier* outbound_fee of the preferred asset's chain, the network initiates a swap from $RUNE -> Preferred Asset on behalf of the affiliate. At the time of writing, PreferredAssetOutboundFeeMultiplier is set to 100, so the preferred asset swap happens when the outbound fee is 1% of the accrued $RUNE.

Configuring a Preferred Asset for a THORName.

1. Register a THORName if not done already. This is done with a MsgDeposit posted to the THORChain network.
2. Set your preferred asset's chain alias (the address you'll be paid out to), and your preferred asset. Note: your preferred asset must be currently supported by THORChain.

For example, if you wanted to be paid out in USDC you would:

1. Grab the full USDC name from the Pools endpoint: ETH.USDC-0XA0B86991C6218B36C1D19D4A2E9EB0CE3606EB48

2. Post a MsgDeposit to the THORChain network with the appropriate memo to register your THORName, set your preferred asset as USDC, and set your Ethereum network address alias. Assuming the following info:

   1. THORChain address: thor1dl7un46w7l7f3ewrnrm6nq58nerjtp0dradjtd
   2. THORName: ac-test
   3. ETH payout address: 0x6621d872f17109d6601c49edba526ebcfd332d5d

   The full memo would look like:

   ~:ac-test:ETH:0x6621d872f17109d6601c49edba526ebcfd332d5d:thor1dl7un46w7l7f3ewrnrm6nq58nerjtp0dradjtd:ETH.USDC-0XA0B86991C6218B36C1D19D4A2E9EB0CE3606EB48

Once you successfully post your MsgDeposit you can verify that your THORName is configured properly. View your THORName info from THORNode at the following endpoint:
https://thornode.ninerealms.com/thorchain/thorname/ac-test

The response should look like:

{
  "affiliate_collector_rune": "0",
  "aliases": [
    {
      "address": "0x6621d872f17109d6601c49edba526ebcfd332d5d",
      "chain": "ETH"
    },
    {
      "address": "thor1dl7un46w7l7f3ewrnrm6nq58nerjtp0dradjtd",
      "chain": "THOR"
    }
  ],
  "expire_block_height": 22061405,
  "name": "ac-test",
  "owner": "thor1dl7un46w7l7f3ewrnrm6nq58nerjtp0dradjtd",
  "preferred_asset": "ETH.USDC-0XA0B86991C6218B36C1D19D4A2E9EB0CE3606EB48"
}

Your THORName is now properly configured and any affiliate fees will begin accruing in the AffiliateCollector module. You can verify that fees are being collected by checking the affiliate_collector_rune value of the above endpoint.

Outbound Fee

This is the fee the Network pays on behalf of the user to send the outbound transaction. To adequately pay for network resources (TSS, compute, state storage) the fee is marked up from what nodes actually pay on-chain by an "Outbound Fee Multiplier" (OFM).

The OFM moves between a MaxOutboundFeeMultiplier and a MinOutboundFeeMultiplier(defined as Network Constants or as Mimir Values), based on the network's current outbound fee "surplus" in relation to a "target surplus". The outbound fee "surplus" is the cumulative difference (in $RUNE) between what the users are charged for outbound fees and what the nodes actually pay. As the network books a "surplus" the OFM slowly decreases from the Max to the Min. Current values for the OFM can be found on the Network Endpoint.

$$outboundFee=txSize\ast gasRate\ast OFM$$

The minimum Outbound Layer1 Fee the network will charge is on /thorchain/mimir and is priced in USD (based on THORChain's USD pool prices). This means really cheap chains still pay their fair share. It is currently set to 100000000 = $1.00

See Outbound Fee for more information.

Fee Ordering for Swaps

Fees are taken in the following order when conducting a swap.

1. Inbound Fee (user wallet controlled, not THORChain controlled)
2. Affiliate Fee (if any) - skimmed from the input.
3. Swap Fee (denoted in output asset)
4. Outbound Fee (taken from the swap output)

To work out the total fees, fees should be converted to a common asset (e.g. RUNE or USD) then added up. Total fees should be less than the input else it is likely to result in a refund.

Refunds and Minimum Swappable Amount

If a transaction fails, it is refunded, thus it will pay the outboundFee for the SourceChain not the DestinationChain. Thus devs should always swap an amount that is a maximum of the following, multiplier by a buffer of at least 4x to allow for sudden gas spikes:

1. The Destination Chain outbound_fee
2. The Source Chain outbound_fee
3. $1.00 (the minimum)

The outbound_fee for each chain is returned on the Inbound Addresses endpoint, priced in the gas asset.

It is strongly recommended to use the recommended_min_amount_in value that is included on the Swap Quote endpoint, which is the calculation described above. This value is priced in the inbound asset of the quote request (in 1e8). This should be the minimum-allowed swap amount for the requested quote.

Remember, if the swap limit is not met or the swap is otherwise refunded the outbound_fee of the Source Chain will be deducted from the input amount, so give your users enough room.

Understanding gas_rate

THORNode keeps track of current gas prices. Access these at the /inbound_addresses endpoint of the THORNode API. The response is an array of objects like this:

{
    "chain": "ETH",
    "pub_key": "thorpub1addwnpepqfzafst6y2f33pdvheq6qe25xyzrwy542m4tq0nfnh6cn67d56n3g3lfwej",
    "address": "0x215520b3943c89e4fa501902ef7b76fdd199023b",
    "router": "0xD37BbE5744D730a1d98d8DC97c42F0Ca46aD7146",
    "halted": false,
    "global_trading_paused": false,
    "chain_trading_paused": false,
    "chain_lp_actions_paused": false,
    "gas_rate": "60",
    "gas_rate_units": "gwei",
    "outbound_tx_size": "100000",
    "outbound_fee": "180200",
    "dust_threshold": "0
}

The gas_rate property can be used to estimate network fees for each chain the swap interacts with. For example, if the swap is BTC -> ETH the swap will incur fees on the bitcoin network and Ethereum network. The gas_rate property works differently on each chain "type" (e.g. EVM, UTXO, BFT).

The gas_rate_units explain what the rate is for chain, as a prompt to the developer.

The outbound_tx_size is what THORChain internally budgets as a typical transaction size for each chain.

The outbound_fee is gas_rate * outbound_tx_size * OFM and developers can use this to budget for the fee to be charged to the user. The current Outbound Fee Multiplier (OFM) can be found on the Network Endpoint.

Keep in mind the outbound_fee is priced in the gas asset of each chain. For chains with tokens, be sure to convert the outbound_fee to the outbound token to determine how much will be taken from the outbound amount. To do this, use the getValueOfAsset1InAsset2 formula described in the Math section.

Fee Calculation by Chain

THORChain (Native Rune)

The THORChain blockchain has a set 0.02 RUNE fee. This is set within the THORChain Constants by NativeTransactionFee. As THORChain is 1e8, 2000000 TOR = 0.02 RUNE

UTXO Chains like Bitcoin

For UXTO chains link Bitcoin, gas_rateis denoted in Satoshis. The gas_rate is calculated by looking at the average previous block fee seen by the THORNodes.

All THORChain transactions use BECH32 so a standard tx size of 250 bytes can be used. The standard UTXO fee is then gas_rate* 250.

EVM Chains like Ethereum

For EVM chains like Ethereum, gas_rateis denoted in GWEI. The gas_rate is calculated by looking at the average previous block fee seen by the THORNodes

An Ether Tx fee is: gasRate * 10^9 (GWEI) * 21000 (units).

An ERC20 Tx is larger: gasRate * 10^9 (GWEI) * 70000 (units)