Overview
The Loan Protocol charges a withdrawal fee when users redeem funds from their lending positions. These fees help support protocol development, maintenance, and ecosystem growth.
Withdrawal Fee Structure
When withdrawing funds from the Loan Protocol, users are charged:
- 5% of the withdrawal amount, or
- $25 USD equivalent
Whichever amount is lower.
This means:
Withdrawal Amount | 5% Fee | Fee Charged |
| $100 | $5 | $5 |
| $250 | $12.50 | $12.50 |
| $500 | $25 | $25 |
| $1,000 | $50 | $25 |
| $10,000 | $500 | $25 |
The maximum withdrawal fee is capped at the equivalent of $25 USD.
When Is the Fee Charged?
The fee is applied when funds are withdrawn from the lending protocol.
Specifically, the fee is charged when:
- Funds are retired from the shares.loan contract within lending.loan.
- The assets are redeemed back to the user's account.
The fee is deducted as part of the withdrawal process.
Liquidation Fee Distribution
The Loan Protocol also allocates a portion of liquidation fees toward protocol development.
Current liquidation rewards are split as follows:
- 5% paid to liquidators
- 5% directed to the protocol treasury
This means that 50% of the total liquidation reward is now returned to the protocol treasury to support ongoing development and maintenance.
Additional Savings
Users can reduce or eliminate withdrawal fees by staking LOAN tokens. See "How Do I Reduce Fees by Staking LOAN?" for details.