Borrow Fees

Notional governance sets the following parameters to determine the amount of fees that borrowers pay to the protocol.

  • Fee rate percent

  • Max fee rate

  • Min fee rate

Borrower fees are a percentage of the borrow rate calculated by the interest rate curve. This percentage is the fee rate percent. The fee is added on top of the borrow rate pulled from the interest rate curve.

For example, if the pre-fee borrow rate is 3% and the fee rate percent is 20%, then the borrow fee will be 0.6% (3% * 20%). The post-fee borrow rate will then be 3.6% (3% + 0.6%).

Min and max fee rate

The min fee rate and max fee rate set bounds on how big or small the borrow fee can be. For example, with a max fee rate of 1% the borrow fee could never be more than 1% even if the pre-fee borrow rate was 20% and the fee rate percent was 20%.

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