Trading Fee

Introduction
Pilgrim Protocol charges the user a trading fee on:
trading rounds on a PilgrimPair pool
on a buyout event of the metaNFT or NFT
on delisting, i.e. reclaiming ownership of the locked NFT
This section describes how trading fees are quantitatively calculated on Pilgrim, and detailed fee distribution logic.
TL;DR:
Pilgrim Protocol charges two types of fees on every round trade: a base fee and a round fee.
The base fee is taken in the form of base tokens, and is used to buy back PIL for distribution to xPIL stakers. Additional PIL rewards are given to round traders as well.
The round fee is taken in the form of rounds, and is sent to the metaNFT owner. This is given in addition to fee subsidizations from the Protocol Treasury, denominated in PIL tokens.
An NFT fee is also charged when NFTs or metaNFTs are traded. This is used to buy back PIL for distribution to xPIL stakers.
Pilgrim is a decentralized protocol; no centralized party takes fees accumulated from the protocol directly.
Fee Calculation Methodology
Definition
1.Base Fee Ratio: fbase=abase/b,b=1000,abase∈[0,b],abase∈Z+f_\text{base} = a_\text{base} / b, b = 1000, a_\text{base} \in [0, b], a_\text{base} \in \mathbb{Z}^{+}fbase​=abase​/b,b=1000,abase​∈[0,b],abase​∈Z+
 
2.Round Fee Ratio: fround=around/b,b=1000,around∈[0,b],around∈Z+f_\text{round} = a_\text{round} / b, b = 1000, a_\text{round} \in [0, b], a_\text{round} \in \mathbb{Z}^{+}fround​=around​/b,b=1000,around​∈[0,b],around​∈Z+
 
3.NFT Fee Ratio: fNFT=aNFT/b,b=1000,aNFT∈[0,b],aNFT∈Z+f_\text{NFT} = a_\text{NFT} / b, b = 1000, a_\text{NFT} \in [0, b], a_\text{NFT} \in \mathbb{Z}^{+}fNFT​=aNFT​/b,b=1000,aNFT​∈[0,b],aNFT​∈Z+
 
4.Base Fee Function:  feebase(n)=ceil(n/b)∗abasefee_\text{base}(n) = ceil(n / b) * a_\text{base}feebase​(n)=ceil(n/b)∗abase​
: A function which calculates how much base tokens are charged as fees.
5.Round Fee Function:  feeround(n)=ceil(m/b)∗around∗Kfee_\text{round(n)} = ceil(m / b) * a_\text{round} * Kfeeround(n)​=ceil(m/b)∗around​∗K
: A function which calculates how much base tokens are charged as fees. Note that the result is also a multiple of KKK
.  
6.NFT Fee Function: feeNFT(n)=ceil(n/b)∗aNFTfee_\text{NFT(n)} = ceil(n / b) * a_\text{NFT}feeNFT(n)​=ceil(n/b)∗aNFT​
 : A function which calculates how much base tokens are charged as fees when metaNFTs or NFTs are traded.
Buying Rounds: Exchanging Base Tokens to Rounds
When a user pays nnn
 base tokens, they receive m⋅K−feeround(m)m \cdot K - fee_\text{round}(m)m⋅K−feeround​(m)
 rounds.
1.The protocol receives nnn
 base tokens -- e.g. PIL, WETH, USDC, etc.
2.​feebase(n)fee_\text{base}(n)feebase​(n)
 base tokens are taken from provided base tokens. The resulting number of base tokens is n−feebase(n)n - fee_\text{base}(n)n−feebase​(n)
.
3.Apply Pilgrim AMM logic: m⋅Km \cdot Km⋅K
 rounds are minted.
4. feeround(m)fee_\text{round}(m)feeround​(m)
 rounds are removed from initially minted rounds. The resulting number of rounds returned is m⋅K−feeround(m)m \cdot K - fee_\text{round}(m)m⋅K−feeround​(m)
​
Selling Rounds: Exchanging Rounds to Base Tokens
When a user pays n⋅Kn \cdot Kn⋅K
 rounds, they receive m−feeround(m)m - fee_\text{round}(m)m−feeround​(m)
 base tokens.
1.The protocol receives n⋅Kn \cdot Kn⋅K
 rounds.
2. feeround(m)fee_\text{round}(m)feeround​(m)
 rounds are taken from provided rounds. The resulting number of rounds is n⋅K−feeround(n)n \cdot K - fee_\text{round}(n)n⋅K−feeround​(n)
.
3.Apply Pilgrim AMM logic: mmm

 base tokens are withdrawn from the protocol.
4. feebase(m)fee_\text{base}(m)feebase​(m)
  base tokens are removed from withdrawn liquidity. The resulting number of base tokens returned is m−feebase(m)m - fee_\text{base}(m)m−feebase​(m)
.
Trading NFTs, metaNFTs, or delisting NFTs
​
When a user pays nnn
 base tokens, metaNFT holders and round holders receive n−feeNFT(n)n - fee_\text{NFT}(n)n−feeNFT​(n)
 base tokens in total.
1.The protocol receives nnn
 base tokens.
2.​feeNFT(n)fee_\text{NFT}(n)feeNFT​(n)
 base tokens are taken from provided base tokens. The resulting number of base tokens is n−feeNFT(n)n - fee_\text{NFT}(n)n−feeNFT​(n)
.
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Last modified 1yr ago