Explanation of fees in Honey's peer-to-contract protocol
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.
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$
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, their debt will be 101.5$. The additional 1.5$ is protocol revenue which can be claimed by the DAO from the lending pool.
Currently, the Honey Development Association and Honey Labs are eligible to claim these fees to fund development of the protocol.