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Fees

There are 3 categories of fees within the Sentiment protocol. Lender fees, Protocol Fees and Borrower Fees.

Protocol Fees​

The Sentiment Protocol has a fee switch on Base Pools that will initially be set to 0. The fee is a percent of interest earned from borrowers. Once Sentiment decentralizes, Sentiment token holders can petition to turn the fee switch on as a means to accrue value to token holders.

Lender Fees​

Super Pools have a performance fee, which allocators can turn on to collect fees in return for risk management services.

Borrower Fees​

Borrowers have three types of fee, which are configurable at both the governance level and the Base Pool level.

  1. Origination Fees: These are fees that are taken as a percent of funds borrowed. Base Pools configure the origination fees.
  2. Interest Rate: This is a continuos fee paid by borrowers on funds borrowed, for the duration of the loan. These can be fixed or dynamic.
  3. Liquidation Fees: This is a fee paid to the protocol if a borrowers position is liquidated. Liquidation fees will go toward an insurance fund that will cover bad debt shortfalls, should they occur.