Fee Distribution
In this section, we will discuss the fees generated by the exchange, how to estimate the yield, APR and how it is distributed back to the JLP Pool.
Fees
The exchange generates fees in various ways and 75% of all fees generated go into the pool.
| Action | Fee |
|---|---|
| Opening a Position | 6 BPS (variable) |
| Closing a Position | 6 BPS (variable) |
| Price Impact Fee | Dependent on size of the trade (variable) |
| Swap Fee (Mint / Burn JLP) | Between 0 BPS to 150 BPS depending on pool weightage |
| Borrow Rate | Dynamically updated based on utilization and market conditions |
To fully understand each fee and how they are imposed, please refer to the trader's guide on fees.
Fee Distribution
The fees are distributed back to the JLP Pool hourly. It occurs at the start of every hour, in UTC time (e.g. 00:00 UTC, 01:00 UTC, 02:00 UTC, and so on).
During the distribution, 75% of realised fees are withdrawn from each custody account's assets.fees_reserves and deposited back into the JLP Pool (while the remaining 25% is sent to Jupiter as a protocol fee).
APR Calculation
The JLP Pool maintains a pool_apr.last_updated field on-chain which records a UNIX timestamp of the latest APR update. After a consecutive week of hourly fee distributions have passed, the APR is recalculated and updated to pool_apr.fee_apr_bps.
APR Calculation Formula
if current_time > (last_updated_time + 1_WEEK):
time_diff = current_time - last_updated_time
// 10_000 represents the scaling factor used to calculate the BPS for the pool's APR
apr_bps = (realized_fee_usd * YEAR_IN_SECONDS * 10_000) / (pool_amount_usd * time_diff)
Estimating Yield
To provide an estimated perspective, you can calculate potential revenue by taking the Jupiter Perpetual Exchange's daily or weekly total volume and multiplying it by a fee percentage.
It is essential to note that pool earnings and losses (index token appreciation/depreciation) are not factored in the overall yield calculation.
Calculate Total Estimated Revenue
To determine the total estimated revenue (excluding price impact and hourly borrow fees) to be deposited into JLP pool, use the following formula.
Using the example values, the estimated revenue to be deposited into JLP pool would be:
- Total Daily Volume: 50 million
- Fee Percentage: 0.06%
- Price Impact Fees: Minimum 0.01%
- Revenue Share Percentage: 75%
- Estimated Revenue: 50_000_000 x 0.06% x 75% = 22_500
Calculate Estimated Share
To determine your specific share or weight in the total JLP pool, use the following formula.
Using the example values, the estimated share percentage would be:
- Your contribution: 1_000
- Total pool amount: 4_000_000
- Your share percentage: 1_000 / 4_000_000 x 100 = 0.025%
CalculateEstimated Revenue Share
Finally, you can calculate your estimated generated revenue share by multiplying the results of the first and second calculations:
Estimated revenue share you generate = 22_500 x 0.025% = $5.625