> For the complete documentation index, see [llms.txt](https://docs.tier1.exchange/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.tier1.exchange/trading/fees-and-tiers.md).

# Fees and Tiers

## Overview

Frontier Chain uses a volume-based fee tier system designed to reward active traders with progressively lower fees based on their 14-day trading volume.

**Key Features**:

* **7 Tiers** (0-6): Progressive fee reduction with volume
* **Separate Spot and Perp Fees**: Different rates for each product
* **Maker Rebates**: Zero fees or negative fees at higher tiers
* **14-Day Rolling Window**: Recent activity determines tier
* **Weighted Volume**: Spot counts 2x, perps count 1x
* **Real-Time Updates**: Tier updated every block

***

## Fee Tier Structure

### Complete Tier Table

| Tier  | 14-Day Volume | Perps Taker | Perps Maker | Spot Taker | Spot Maker |
| ----- | ------------- | ----------- | ----------- | ---------- | ---------- |
| **0** | ≤ $5M         | 0.0450%     | 0.0150%     | 0.0700%    | 0.0400%    |
| **1** | ≥ $5M         | 0.0400%     | 0.0120%     | 0.0800%    | 0.0300%    |
| **2** | ≥ $25M        | 0.0350%     | 0.0080%     | 0.0500%    | 0.0200%    |
| **3** | ≥ $100M       | 0.0300%     | 0.0040%     | 0.0400%    | 0.0100%    |
| **4** | ≥ $500M       | 0.0280%     | 0.0000%     | 0.0350%    | 0.0100%    |
| **5** | ≥ $2B         | 0.0250%     | 0.0000%     | 0.0300%    | 0.0000%    |
| **6** | ≥ $7B         | 0.0240%     | 0.0000%     | 0.0250%    | 0.0000%    |

### Maker Rebate Tiers

High-volume market makers can earn **negative fees** (rebates) based on their maker volume share:

| Tier  | 14-Day Maker Volume Share | Maker Rebate |
| ----- | ------------------------- | ------------ |
| **1** | > 0.50%                   | -0.001%      |
| **2** | > 1.50%                   | -0.002%      |
| **3** | > 3.00%                   | -0.003%      |

**Important Notes**:

* Rebates apply to maker fees only (not taker fees)
* Calculated as percentage of total platform maker volume
* Staking discounts do not apply to maker rebates
* Negative fees mean you earn money for providing liquidity

**Example**:

```
Platform Maker Volume (14 days): $2,000,000,000
Your Maker Volume: $35,000,000
Your Share: 35M / 2B = 1.75%

Tier: 2 (> 1.50% share)
Rebate: -0.002%

Trade: Maker order for $10,000,000
Rebate Earned: $10,000,000 × 0.00002 = $200
```

## Volume Calculation

### Weighted Volume Formula

Trading volume is weighted to reflect liquidity provision value:

**Formula**:

```
Weighted Volume = (Spot Trading Volume × 2) + (Perp Trading Volume × 1)
```

**Rationale**:

* Spot trading provides more stable liquidity
* Spot settlement is final (no funding)
* Encourages balanced market making
* Reflects actual capital deployment

### Calculation Examples

**Example 1: Spot Trader**

```
Spot Volume: $10,000,000
Perp Volume: $0
Weighted Volume = ($10,000,000 × 2) + ($0 × 1)
                = $20,000,000
Tier: 1 (≥ $5M, < $25M)
```

**Example 2: Perp Trader**

```
Spot Volume: $0
Perp Volume: $10,000,000
Weighted Volume = ($0 × 2) + ($10,000,000 × 1)
                = $10,000,000
Tier: 1 (≥ $5M, < $25M)
```

**Example 3: Mixed Trader**

```
Spot Volume: $20,000,000
Perp Volume: $30,000,000
Weighted Volume = ($20,000,000 × 2) + ($30,000,000 × 1)
                = $40,000,000 + $30,000,000
                = $70,000,000
Tier: 2 (≥ $25M, < $100M)
```

**Example 4: High-Volume Market Maker**

```
Spot Volume: $500,000,000
Perp Volume: $800,000,000
Weighted Volume = ($500,000,000 × 2) + ($800,000,000 × 1)
                = $1,000,000,000 + $800,000,000
                = $1,800,000,000
Tier: 4 (≥ $500M, < $2B)
```

### Rolling 14-Day Window

Volume tracked over a rolling 14-day period:

**Characteristics**:

* **Real-Time**: Updated every block (100ms)
* **Rolling**: Old days drop off as new days added
* **Fair**: Recent activity matters most
* **Predictable**: Easy to track progress

**Timeline**:

```
Day 1-14: Initial period, volume accumulates
Day 15: Day 1 volume drops off
Day 16: Day 2 volume drops off
...and so on
```

***

## Maker vs Taker Fees

### Maker Orders

Orders that **add liquidity** to the order book.

**Definition**:

* Limit order that does not immediately match
* Rests in order book waiting for fill
* Increases available liquidity

**Examples**:

```
Scenario 1: BTC/USDC order book
Best Bid: $89,990
Best Ask: $90,010

Place Bid: $89,995
Result: MAKER (adds to bid side)

Place Ask: $90,005
Result: MAKER (adds to ask side)
```

**Fee Benefit**:

* Lower fees than takers
* Zero fees at Tier 3+ (perpetuals)
* Zero fees at Tier 5+ (spot)

### Taker Orders

Orders that **remove liquidity** from the order book.

**Definition**:

* Immediately matches existing order
* Reduces available liquidity
* Faster execution

**Examples**:

```
Scenario: BTC/USDC order book
Best Bid: $89,990
Best Ask: $90,010

Market Buy:
Result: TAKER (takes from ask side @ $90,010)

Limit Buy @ $90,010:
Result: TAKER (immediately matches ask)

Limit Buy @ $90,020:
Result: TAKER (crosses spread, matches ask)
```

**Fee Structure**:

* Higher fees than makers
* Still competitive vs competitors
* As low as 0.02% at Tier 6 (perpetuals)

***

## Fee Calculation Examples

### Spot Trading Fees

**Tier 0 Market Maker**:

```
Trade: Buy 1 BTC @ $90,000 (maker)
Notional: 1 × $90,000 = $90,000
Fee Rate: 0.04%
Fee: $90,000 × 0.0004 = $36 USDC
Total Cost: $90,036 USDC
```

**Tier 0 Aggressive Trader**:

```
Trade: Buy 1 BTC @ $90,000 (taker)
Notional: 1 × $90,000 = $90,000
Fee Rate: 0.07%
Fee: $90,000 × 0.0007 = $63 USDC
Total Cost: $90,063 USDC
```

**Tier 5 Market Maker**:

```
Trade: Buy 1 BTC @ $90,000 (maker)
Notional: 1 × $90,000 = $90,000
Fee Rate: 0.00%
Fee: $0
Total Cost: $90,000 USDC (no fee!)
```

### Perpetual Trading Fees

**Tier 0 Perp Trader**:

```
Position: Long 10 ETH @ $3,500 (taker)
Notional: 10 × $3,500 = $35,000
Fee Rate: 0.05%
Fee: $35,000 × 0.0005 = $17.50 USDC
Total Entry Cost: Margin + $17.50
```

**Tier 3 Perp Market Maker**:

```
Position: Long 10 ETH @ $3,500 (maker)
Notional: 10 × $3,500 = $35,000
Fee Rate: 0.00%
Fee: $0
Total Entry Cost: Margin only (no fee!)
```

**Tier 6 Perp Trader**:

```
Position: Short 100 SOL @ $150 (taker)
Notional: 100 × $150 = $15,000
Fee Rate: 0.02%
Fee: $15,000 × 0.0002 = $3 USDC
Total Entry Cost: Margin + $3
```

***

## Comparison with Competitors

### Spot Trading Fee Comparison

| Exchange              | Maker Fee | Taker Fee | Notes                 |
| --------------------- | --------- | --------- | --------------------- |
| **Frontier (Tier 0)** | 0.04%     | 0.07%     | Volume: < $5M         |
| **Frontier (Tier 3)** | 0.01%     | 0.04%     | Volume: $100M - $500M |
| **Frontier (Tier 6)** | 0.00%     | 0.03%     | Volume: ≥ $7B         |
| Binance (VIP 0)       | 0.10%     | 0.10%     | <$250K volume         |
| Coinbase Advanced     | 0.40%     | 0.60%     | <$10K volume          |
| Kraken (Starter)      | 0.16%     | 0.26%     | <$50K volume          |

### Perpetuals Fee Comparison

| Exchange                | Maker Fee | Taker Fee | Notes                 |
| ----------------------- | --------- | --------- | --------------------- |
| **Frontier (Tier 0)**   | 0.02%     | 0.05%     | Volume: < $5M         |
| **Frontier (Tier 3)**   | 0.00%     | 0.03%     | Volume: $100M - $500M |
| **Frontier (Tier 6)**   | 0.00%     | 0.024%    | Volume: ≥ $7B         |
| Binance Futures (VIP 0) | 0.02%     | 0.05%     | <$250K volume         |
| dYdX (Tier 0)           | 0.02%     | 0.05%     | <$100K volume         |

**Key Advantage**: Even at Tier 0, Frontier matches or beats centralized exchange fees while providing blockchain transparency and self-custody.

***

## Tier Advancement Strategy

### Path to Tier 1 ($5M+ volume)

**Approaches**:

**Market Making**:

* Place orders on both sides
* Capture spread
* Volume counts 2× (if spot)
* Low capital intensity

**Active Trading**:

* Directional positions
* Frequent rebalancing
* Mix spot and perps
* Higher capital intensity

**Example Strategy**:

```
Goal: Reach Tier 1 in 14 days
Target Volume: $5,000,000 weighted

Approach A: Spot Market Making
- Daily volume: $5M / 14 / 2 = $178,571 spot per day
- Both sides: $89,286 buy + $89,286 sell per day
- Capital: ~$100K (rotating)

Approach B: Perp Trading
- Daily volume: $5M / 14 = $357,143 perp per day
- ~$180K notional per day (10 trades × $18K each)
- Capital: ~$10K-$20K (with 10-20x leverage)
```

### Path to Tier 3 ($100M+ volume)

**Professional Trading**:

* Market making across all 5 pairs
* Automated strategies
* Cross-exchange arbitrage
* Substantial capital deployment

**Example**:

```
Goal: Tier 3 (≥ $100M weighted in 14 days)
Daily Target: $100M / 14 = $7,142,857

Strategy: Multi-Pair Market Making
- BTC/USDC: $2M daily (spot, counts 2×) = $4M weighted
- ETH/USDC: $1M daily (spot, counts 2×) = $2M weighted
- SOL/USDC: $500K daily (spot, counts 2×) = $1M weighted
- Perps: $2M daily notional = $2M weighted
Total Weighted: $9M daily

Capital Required: ~$1M+ rotating
```

***

## Fee Optimization Strategies

### 1. Prioritize Maker Orders

**Technique**:

* Use limit orders instead of market orders
* Place orders with limit at favorable prices
* Wait for fills rather than crossing spread

**Savings**:

```
Tier 0:
Taker: 0.07% vs Maker: 0.04% = 0.03% savings
On $1M volume: $300 saved

Tier 3:
Taker: 0.04% vs Maker: 0.00% = 0.04% savings
On $1M volume: $400 saved
```

### 2. Maximize Spot vs Perp Ratio

**Logic**:

* Spot counts 2× toward tier
* Same fee reduction applies
* More volume credit per trade

**Example**:

```
$1M spot = $2M weighted → Tier progress
$1M perp = $1M weighted → Less tier progress

If indifferent, trade spot for faster tier advancement
```

### 3. Time Tier Transitions

**Strategy**:

* Track current 14-day volume
* Time large trades around tier boundaries
* Compound fee savings

**Example**:

```
Current: $4.9M weighted (Tier 0)
Planned: $2M trade incoming

Option A: Execute now
- Total: $6.9M (Tier 1)
- Fees: 0.03% maker on $2M trade = $600

Option B: Wait until $1M drops off
- Current drops to $3.9M
- Execute: $5.9M (Tier 1)
- Same tier, but better positioned for Tier 2
```

### 4. Use Post-Only for Market Making

**Benefit**:

* Guarantees maker fees
* Order cancelled if would take
* No accidental taker fees

**Use Case**:

```
Strategy: Market making around mid-price
Use post-only on all orders
Result: 100% maker fees, never taker
```

***

## Monitoring Your Tier Status

### Key Metrics to Track

**Volume Metrics**:

* Current 14-day weighted volume
* Daily volume contribution
* Days until volume drops off
* Distance to next tier

**Fee Metrics**:

* Total fees paid (current period)
* Effective fee rate (weighted average)
* Maker/taker ratio
* Estimated savings at next tier

### API Endpoints

**Get Current Tier**:

```
GET /v1/user/fee-tier
Response: {
  "tier": 2,
  "volume_14d": "45000000.000000",
  "spot_volume": "15000000.000000",
  "perp_volume": "30000000.000000",
  "next_tier_threshold": "100000000.000000",
  "days_until_rolloff": [
    {"day": 1, "volume": "2500000.000000"},
    {"day": 2, "volume": "3200000.000000"},
    ...
  ]
}
```

**Get Fee Breakdown**:

```
GET /v1/user/fees/breakdown
Response: {
  "total_fees_paid": "1250.500000",
  "maker_fees": "450.250000",
  "taker_fees": "800.250000",
  "maker_volume": "25000000.000000",
  "taker_volume": "20000000.000000",
  "effective_rate": "0.000278"
}
```

***

## Fee Collection and Distribution

### Collection Mechanism

**Timing**:

* Deducted at time of trade execution
* Included in block consensus
* Atomic with trade settlement

**Currency**:

* All fees collected in USDC
* Simplified accounting
* Single fee currency across all pairs

**Calculation**:

```
Buy Order Fee:
Total Cost = (Quantity × Price) × (1 + Fee Rate)

Sell Order Fee:
Total Proceeds = (Quantity × Price) × (1 - Fee Rate)
```

### Fee Distribution

**Protocol Revenue**:

* Collected fees go to protocol treasury
* Used for:
  * Validator rewards
  * Protocol development
  * Liquidity incentives
  * Emergency fund backing

**Not Paid Between Users**:

* Unlike funding rates (perps only)
* Fees are protocol revenue
* No rebate mechanism (yet)

***

## Special Considerations

### Wash Trading Detection

**Prevention**:

* Self-trade prevention automatic
* Same-user orders cannot match
* Volume not inflated by self-trades
* Fair tier qualification

### Volume Verification

**Transparency**:

* All trades on-chain
* Verifiable volume calculation
* Real-time tier updates
* No disputes over tier status

### Tier Maintenance

**No Minimum**:

* No requirement to maintain tier once achieved
* Natural decay as old volume drops off
* Trade more to maintain/advance
* Fair and automatic

***

## Conclusion

Frontier Chain's fee tier system provides transparent, volume-based fee reductions that reward active traders. The combination of competitive base fees, aggressive tier thresholds, and weighted volume calculation creates a compelling fee structure that rivals centralized exchanges while maintaining on-chain transparency.

**Key Takeaways**:

* 7 tiers with fees as low as 0.00% maker / 0.02% taker
* Weighted volume: spot counts 2×, perps count 1×
* 14-day rolling window for fair tier determination
* Real-time tier updates every block
* Competitive with or better than centralized exchanges

**Next Steps**:

{% content-ref url="/pages/rOUak0CRb4glHjCFnU6D" %}
[Spot Trading](/trading/spot-trading.md)
{% endcontent-ref %}

{% content-ref url="/pages/JT1SSA4mVOHRVdV9eHZP" %}
[Perpetual Futures](/trading/perpetuals.md)
{% endcontent-ref %}

{% content-ref url="/pages/CcREAUGF1Nl9iZ8b4QZg" %}
[Order Flow](/architecture/order-flow.md)
{% endcontent-ref %}


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