Fee Model

Trading Fees

AGON markets use a maker/taker fee structure on the CPMM AMM (ConditionalTokens.sol):

These values are the on-chain defaults (makerFeeBps = 10, takerFeeBps = 30 in ConditionalTokens.sol). They are reference parameters — the AMM uses an adaptive dynamic fee that scales with trade size relative to pool depth:

• Large pools (>= $50k): base 25 bps, up to 2x dynamic multiplier.
• Medium pools (>= $10k): governance-adjustable base fee (default above), up to dynamicFeeMultiplier x.
• Small pools (>= $1k): base 75 bps, up to 6x dynamic multiplier.

This means very large trades in thin pools pay a higher effective rate to compensate for price impact and protect LPs.

Fee currency. Fees are normally collected in USDC. Traders may optionally pay in AGON to receive a 20% discount (effective blended rate ~0.16%). When paid in AGON: 50% is burned immediately, 50% is swapped to USDC and sent to stakers via FeeDistributor.

Market Creation Fee

Any address may create a permissionless binary market by staking USDC collateral into MarketFactory.sol. The required minimum stake is set per collateral token in TokenRegistry.sol (the minStake field). The stake is not a protocol fee — it is locked as the initial liquidity seed for the YES/NO CPMM pool (ConditionalTokens.initializeMarket).

The creation stake is credited as initial pool reserves and remains in the market until resolution. Once the market resolves, the creator can claim back their proportional share of the closing pool position via stakeClaimed. There is no separate USDC market-creation fee charged by the protocol on top of the stake.

MarketFactory also exposes protocolFeeBps and creatorFeeBps (factory-level, distinct from AMM fees), capped at a combined maximum of 1% (100 bps total per the [Pivot-1] constraint). The current deployed values are TBD — confirm from packages/contracts/broadcast/ or the deployer.

Resolution Fee

Validators who participate in the PoAIC (Proof of AI Concordance) oracle layer are remunerated via FeeDistributor — specifically from the staking leg of fee distributions. Per ADR-003, validators bear their own inference costs and are compensated from the protocol fee split plus an ArenaRewards oracle budget (20M AGON allocated from the LP Mining bucket). There is no separate per-resolution USDC fee charged to traders. The equilibrium condition is: weekly validator rewards / weekly inference cost >= 1.

Fee Flow

All USDC fees collected by ConditionalTokens and TournamentEscrow flow into FeeDistributor.sol. The distributor applies a configurable split:

Trade / Tournament
       |
       | USDC fees (30% of gross trade value, protocol leg)
       v
 FeeDistributor.sol
       |
       |--- buybackBps  --> BuybackBurn.sol --> swap USDC to AGON --> burn
       |--- stakingBps  --> ReputationStaking.sol --> USDC yield to veAGON stakers
       |--- vaultBps    --> ProtocolLiquidityVault --> compounding POL on Aerodrome
       |--- remainder   --> Treasury multisig (ops, grants, audit)

The split percentages are governed by GovernanceDAO via a TimelockController (48-hour delay). Constructor defaults set buybackBps = 2000 (20%) and stakingBps = 5000 (50%), meaning treasury receives the remaining 30% by default (vaultBps starts at 0 until governance activates it). Actual deployed values may differ — confirm from FeeDistributor constructor args in packages/contracts/broadcast/.

Additional AGON-denominated fee routing (outside FeeDistributor):

• Trading fees paid in AGON: 50% burned directly, 50% to stakers via FeeDistributor.
• Cosmetic purchases in AGON: 40% burned, 40% to stakers, 20% to POL Vault.

Summary: Where Fees Come From and Where They Go

See Also

• AGON Tokenomics — total supply, distribution, and the full deflationary model.
• Buyback and Burn (Phase 2) — BuybackBurn.sol deep-dive, TWAP parameters, governance controls.