Clearing V1

Fees

The protocol charges two fees, a mint fee when an option is written and an exercise fee when it is exercised. Each has a hard protocol cap fixed at deployment, and within that cap the actual fee is set per market when the ticker is listed and frozen for its life. Neither fee is ever taken from the collateral behind an option: the mint fee is added on top of the bond, and the exercise fee comes out of the profit a holder collects.

Two fees, both capped

There are exactly two, and they sit on different bases:

The mint fee applies when a writer mints against their cover, on the option bond, the Black-Scholes value the smile prices. A 1% fee on a $200 bond is $2: the writer pays $202, the $200 stays as refundable collateral and the $2 is the fee. (The core prices the bond, so it can fee on it; the oracleless protocol could not see a premium, so it fee'd on notional.)
The exercise fee applies when a holder exercises in the money, a naked long, or the long leg of a debit spread, on the intrinsic they collect, their profit. Collecting $100 of intrinsic at 10 bps costs $0.10.

Each is bounded by a protocol maximum, a mint-fee cap and an exercise-fee cap set once when the core is deployed and never exceedable afterward. The caps are the ceiling: no market can be listed above them, and no later change can raise them.

Set per market, frozen at creation

Within the caps, the fee is a per-market setting. When a ticker is listed, its mint fee, its exercise fee, and its fee recipient are written into the market and frozen: they cannot be changed once the ticker is deployed. A writer or trader sees a market’s fee schedule up front and knows it holds for the market’s entire life. Admin sets these per-market fees; anyone else listing a market takes the protocol defaults and cannot set custom ones.

Never from the backing

This is the safety property: neither fee is ever taken from the collateral behind an option. The mint fee is added on top of the bond the writer posts, not carved out of it, so the bond still fully backs the short. The exercise fee comes out of the intrinsic the holder collects, their profit, so it touches only the payout, never anyone’s backing. Both accrue to the fee recipient as a claimable balance rather than being sent inline, so a mint or an exercise can never be broken by a fee transfer failing, and the backing invariant holds regardless.

Per-market configurability

Because fees live on the market, they are tuned market by market rather than set once for the whole protocol. A new market can launch with fees waived to bootstrap it, a deeper one can carry the standard schedule, and the recipient can differ per market, all within the caps and all frozen the moment the ticker goes live. It is how fee policy is steered per market to suit different participants, without ever changing the deal on options already written.

The builder split

A builder’s cut comes out of the fee, not on top of it: when a code is attached, a share of the fee is credited to the builder and the rest to the protocol, and the trader pays the same either way. See Builder codes for how attribution works.