> For the complete documentation index, see [llms.txt](https://weissfi.gitbook.io/weissfi-documentation/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://weissfi.gitbook.io/weissfi-documentation/platform-fees.md).

# Platform Fees

WeissFi provides a transparent fee structure to ensure users have full visibility into the costs associated with borrowing, repayments, liquidations, and redemptions. Below is a breakdown of all applicable fees.

***

## **Borrowing Fees**

When drawing WEIS from a Trove, a **one-time borrowing fee** is charged on the borrowed amount and added to the borrower’s debt.

### **Borrowing Fee**

* **0.75%** fee on the borrowed amount.
* Applied **each time** the borrower **draws additional WEIS** from their Trove.
* **Added directly to the debt**, rather than deducted from the borrowed amount.

{% hint style="info" %}
**100%** → Allocated to the WeissFi team for protocol sustainability.
{% endhint %}

### **Upfront Interest Payment**

* When opening a loan, borrowers must pay **7 days of interest upfront**.
* This interest is **added to the debt** at loan creation.
* Each time the borrower **modifies their interest rate**, they must **pay another 7 days of interest upfront** to prevent abuse.

{% hint style="info" %}
**100%** → Distributed to **Earners** in the **Stability Pool**.
{% endhint %}

***

## **Interest Rate (Ongoing Borrowing Cost)**

### **Annual Interest Rate (User-Defined)**

* Borrowers **set their own interest rate** at loan creation.
* Interest accrues over time and **is added to the outstanding loan balance**.
* The **higher the interest rate, the lower the redemption risk**, but it increases the total cost of borrowing.

### **Interest Rate Modifications**

* Borrowers can **modify their interest rate** at any time.
* Each time the interest rate is changed, **7 days of interest** (based on the new rate) is **immediately added to the debt**.
* This rule prevents manipulation of interest rates and ensures fair compensation for liquidity providers and lenders.

{% hint style="info" %}
**Interest Fee Distribution:**

* **75%** → Distributed to **Earners** in the **Stability Pool**.
* **25%** → Allocated to the **Liquidity Pool** for **liquidity providers**.
  {% endhint %}

***

## **Liquidation Fees**

If a borrower’s **Liquidation Price** is reached, their collateral is liquidated to cover the debt.

### **Liquidation Conditions:**

* If a borrower's **Loan-to-Value (LTV) exceeds 90%**, their loan is **automatically liquidated**.
* A **6% liquidation penalty** is applied to the borrower’s collateral.
* The **borrower keeps the remaining collateral** after liquidation.

{% hint style="info" %}
**Liquidation Fees Distribution:**

* **85%** → Distributed to **Earners** in the **Stability Pool**.
* **15%** → Allocated to the WeissFi team for protocol sustainability.
  {% endhint %}

***

## **Redemption Fees**

Redemptions occur when **WEIS trades below $1**.

Redemption fees are based on the **baseRate** state variable, which is dynamically updated. The **baseRate** increases with each redemption, and exponentially decays according to time passed since the last redemption (half-life of 6 hours).

### **Redemption Fee: min (0.5% + baseRate, 100%)**

* The **baseRate dynamically adjusts** based on **redemption demand**.
* **Higher redemption demand increases the fee**, while lower demand gradually reduces it over time.
* Borrowers affected by **redemptions do not lose value in USD terms**, as their **debt is reduced proportionally**.

***

## **Summary**

<table><thead><tr><th width="292">Fee Type</th><th>Details</th></tr></thead><tbody><tr><td><strong>Borrowing Fee</strong></td><td><strong>0.75%</strong> on each WEIS draw, added to debt.</td></tr></tbody></table>

<table data-header-hidden><thead><tr><th width="294"></th><th></th></tr></thead><tbody><tr><td><strong>Upfront Interest Payment</strong></td><td><strong>7 days of interest</strong> paid upfront at loan creation and upon interest rate modification.</td></tr></tbody></table>

<table data-header-hidden><thead><tr><th width="294"></th><th></th></tr></thead><tbody><tr><td><strong>Ongoing Interest Rate</strong></td><td>Set by the borrower, accrues over time.</td></tr></tbody></table>

<table data-header-hidden><thead><tr><th width="296"></th><th></th></tr></thead><tbody><tr><td><strong>Interest Rate Modifications</strong></td><td><strong>Each modification adds 7 days of interest</strong> to the debt.</td></tr></tbody></table>

<table data-header-hidden><thead><tr><th width="297"></th><th></th></tr></thead><tbody><tr><td><strong>Liquidation Penalty</strong></td><td><strong>6% of collateral</strong> taken if liquidation occurs.</td></tr></tbody></table>

<table data-header-hidden><thead><tr><th width="299"></th><th></th></tr></thead><tbody><tr><td><strong>Liquidation Fee Distribution</strong></td><td><strong>85%</strong> to Stability Pool, <strong>15%</strong> to WeissFi team.</td></tr></tbody></table>

<table data-header-hidden><thead><tr><th width="298"></th><th></th></tr></thead><tbody><tr><td><strong>Redemption Fee</strong></td><td><strong>Minimum 0.5% + baseRate</strong>, dynamically adjusted based on demand.</td></tr></tbody></table>

WeissFi ensures **full transparency and predictability**, with **no hidden costs**. All fees are **fixed**, and **borrowers remain in control of their interest rates**.