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:

Spot TradingPerpetual FuturesOrder Flow