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Fees

Explanation of fees in Honey's peer-to-contract protocol

Protocol fees

Honey charges a 10% commission on interest rates which go to the Honey DAO multisig wallet.
If borrower's pay 100$ worth of interest to lenders, lenders will receive 90$, with the remaining 10$ going to the DAO.

Admin fees

Market creators can institute a fee in their markets. These admin fees also work as a commission on interest rates, and can range anywhere from 0% to 50% of the accrued interest in a market.
Admin fees are deducted from the total interest paid at the same time as protocol fees.
In a market with a 5% admin fee, if borrower's pay 100$ worth of interest to lenders: - lenders will receive 85$ - Honey DAO will receive 10$ - Market admin will receive 5$

Borrow fees

These fees are a commission on the debt issued by the protocol. Honey takes 1.5% of the debt upon borrowing.
If a borrower withdraws 100$ worth of debt, they will withdraw 101.5$ from the lending pool. Their debt upon borrowing will be set at 101.5$, and they will receive the requested 100$.
Borrow fees are currently set to 0% on our Solana NFT lending beta and replaced by a minimum interest of 150 bps on debt.

Revenue

Currently, the Honey Development Association and Honey Labs are eligible to claim these fees to fund development of the protocol.