Fees
Every fee in the protocol, who pays it, who receives it, and the four things that are free.
There are six fees. All of them are fixed in the constructor and none can be changed by anyone, including by the key that exists for the first year.
The table
| Fee | Amount | Paid by | Received by |
|---|---|---|---|
| Origination | 7 days of interest at your own rate | Borrower, added to debt | Stability Pool and liquidity incentives |
| Interest | Your chosen rate, 1.5% floor to 100% | Borrower, continuously | Stability Pool and liquidity incentives |
| Early rate change | 7 days of interest at the new rate, only within 7 days days of the last change | Borrower, added to debt | Stability Pool and liquidity incentives |
| Redemption | 0.5% + a decaying base rate, +0.25 points in the extended session | The redeemer | The redeemed borrower — it stays in their collateral |
| PSM entry | 0.05% | Whoever swaps USDG in | Stability Pools of active branches |
| PSM exit | 0.20% | Whoever swaps fyUSD out | Stability Pools of active branches |
Rules R-5.6.1, R-5.7.1, R-7.5.1, R-8.1.1, R-8.2.1, R-8.5.3
What is free
- Repaying. No fee, at any time, in any amount, in fyUSD.
- Closing. No fee.
close()repays the debt and returns the collateral. - Adding collateral. No fee.
- Depositing to and withdrawing from a Stability Pool. No fee, no lock, no cooldown. sfyUSD charges 0% management and 0% performance.
Rules R-1.1.3, R-1.1.5, R-9.5.1
Origination, in detail
How it is calculated
fee = amount borrowed × your rate × 7 ÷ 365
at the 1.5% Tier 1 floor: 0.0288% of the amount
at 4%: 0.0767% — 3.84 fyUSD on a 5,000 fyUSD loan
It is added to your debt rather than deducted from your proceeds, so you receive exactly what you asked for. It counts toward the minimum debt, the caps and your resulting collateral ratio. It is charged on the initial borrow and on each increase, never on a repayment.
Pricing it in days of your own rate means a borrower who intends to hold for a year pays a trivial amount and a borrower who opens and closes repeatedly pays every time. It is a cost of churn, not a cost of borrowing.
Rule R-5.6.1
Redemption, in detail
The redemption fee is unusual and worth stating twice: it is paid by the person redeeming, and it stays inside the collateral of the borrower who was redeemed.
How it is calculated
fee rate = min(100%, 0.5% + baseRate)
after a redemption: baseRate += amount burned ÷ total fyUSD supply
baseRate decays with a 6-hour half-life
Redeeming $200,000 against a $4M supply pushes the fee from 0.5% to 5.5%, which prices out further redemptions until it decays: 2.75% six hours later, 1.4% twelve hours later.
Guarantee
Redemption fees never pass through the interest router and are never taken from the redeemed borrower. Being redeemed is an exchange at oracle price, and the fee makes it marginally favourable to you rather than costly.
Rules R-7.4.1, R-7.5.2
Liquidation, which is not a fee
If your position is liquidated, part of your collateral is seized at a bonus to the liquidator or the Stability Pool. This is a cost, not a fee, and it is bounded:
| Tier 1 | Tier 2 | |
|---|---|---|
| Base bonus | 5% | 7% |
| Maximum bonus in any circumstance | 15% | 15% |
| Keeper share | 0.5% of the seizure, capped at $200 | same |
Liquidations are partial by default: the amount taken is the amount that brings your ratio back to a target of 154% on Tier 1, not your whole position. Full liquidation happens only if your ratio is under 105%, or if what would be left is below the minimum debt.
Rules R-6.3.1, R-6.3.2, R-6.4.1, R-6.4.2
Where the money goes
Every fee that is not the redemption fee is minted as fyUSD and routed the instant it is created:
| Recipient | Phase 1 | After $25M of debt |
|---|---|---|
| Stability Pool of the branch | 90% | 75% |
| fyUSD/USDG liquidity incentives | 10% | 10% |
| Development company | 0% | 15% |
Five points are diverted to the Backstop while it holds less than 2% of total debt — from the pool's share in phase 1, from the company's share afterwards. The company receives nothing at all until total debt passes $25M, and its share is capped at 20% by a constructor assertion in every regime. The switch is a permissionless one-way latch on a debt threshold, not a decision.
If total Stability Pool deposits fall under 30% of fyUSD supply, the company's share is automatically redirected into the pools until the ratio recovers to 40%.
Rules R-10.1, R-10.2, R-10.3, R-10.4, R-10.8
Round trips
| Path | Cost |
|---|---|
| USDG → fyUSD → USDG | 0.25% |
| USDG → sfyUSD → USDG | 0.25%, plus whatever the share price did |
| USDG → repay debt | 0.05% |
| Open and close a loan within a week | 7 days of interest, once |
Risk
None of these figures include the price you get when you buy or sell fyUSD on a decentralised exchange rather than through the PSM. If the PSM's entry capacity is exhausted, fyUSD can trade above $1.0005 and the market price is what you pay. No fee schedule protects you from that; only the cap and the passage of time do.
Rule R-8.4.1
Last reviewed: 2026-09-07 · Spec v0.4
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