The Promotional Period: Reduced Taker Fees is a limited time program designed to increase taker volume on Drift Protocol by reducing taker fees.
The existing fee structure has been amended for a limited time to allow select traders to:
- have access to the VIP Tier with only $10k staked in the Insurance Fund; and to
- increase the fee discount for the VIP Tier.
Promotional Period: December 2022 to February 2023
Fee Schedule
Current Fee Schedule
Promotional Fee Schedule
Requirements
Takers are charged a variable Taker Fee depending on which Tier they belong to.
Tier 1 — 10bps: ****Default tier
Tier 2 — 9bps: ****Either stake more than 500 or trade over 1m in volume (30D average)
Tier 3 — 8bps: ****Either stake more than 1K or trade over 5m in volume (30D average)
Tier 4 — 7bps: ****Either stake more than 2K or trade over 10m in volume (30D average)
Tier 5 — 6bps: ****Either stake more than 5K or trade over 50m in volume (30D average)
VIP — 3bps: ****Either stake more than 10K or trade over 100m in volume (30D average)
Timeline
Subject to the Disclaimers, this is a limited time fee structure for select participants starting:
Promotional Period begins: Monday, 5 December 2022 at 00:00 UTC
Promotional Period ends: Friday, 1 February 2023 at 00:00 UTC
Insurance Fund Information
What is the Insurance Fund?
Drift's Insurance Fund is the first backstop to maintaining the solvency of the exchange in the event of any bankruptcies. Any user can stake into Drift's USDC Insurance Fund to accrue fees from Revenue Pool at the risk of resolving bankruptcies / deficits.
Anyone can provide passive liquidity by staking the corresponding asset into the Insurance Fund to further collateralise it in return for a portion of the liquidation and trading fees generated by the exchange.
When is the Insurance Fund used?
The Insurance Fund is used to pay off liabilities when an account is bankrupt.
By default the Insurance Fund will pay out any bankrupt user losses:
- in full for bank balances; and
- up to the market's set max insurance limit.
Drift Protocol has multiple asset pools. As a result:
- USDC balances in the Insurance Fund will only cover USDC-denominated liabilities.
- SOL balances in the Insurance Fund will only cover SOL-denominated liabilities, etc.
How is the Insurance Fund funded?
The Insurance Fund is funded via premiums collected from liquidation fees, trading fees, and borrow & lend fees. Since exchange fees are collected in USDC, they will be pooled in the USDC pool. The USDC pool will backstop all perpetual liquidations.
Insurance Fund Staking
What is Insurance Fund Staking?
Insurance Fund Staking is a mechanism designed for:
- the protocol to bootstrap its Insurance Fund; and
- users to have exposure to the fees generated by the exchange.
How often and how much does Insurance Fund Staking payout?
Users that stake USDC into the Insurance Fund are rewarded with their proportionate share of the revenue pool every hour. The proportionate share is calculated dividing your total staked amount by the total amount staked in the Insurance Fund.
For example, if you stake $10,000 USDC and the total amount staked in the Insurance Fund at the time is $5000 (bringing the total to $15,000), you will be paid 66% of the fees generated by the exchange per hour.
Resources
https://docs.drift.trade/insurance-fund-staking
https://driftv2.streamlit.app/?tab=IF-Stakers
https://twitter.com/0xNineteen/status/1590660825035210752
https://solscan.io/account/2CqkQvYxp9Mq4PqLvAQ1eryYxebUh4Liyn5YMDtXsYci#splTransfer
Disclaimers
Drift Protocol reserves the right to end the promotional period and the Taker Incentive Program at any time. If the Drift Protocol chooses to do so, it will provide notice to participating users, but such notice is not required in order to conclude the program early or extend the program. Please note that the terms and conditions of this program are subject to change without notice.
There are risks associated with Insurance Fund Staking. Read more about the risks here:
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