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Fee Structure

CherryLend Flat Fee Structure Overview

Overview of Fee Structure

CherryLend implements a transparent and straightforward fee system, designed to maintain the platform's integrity and sustainability. The fee structure is applied uniformly across various loan-related operations, ensuring consistency and predictability for our users.

Applicable Fees

A consistent fee of 1% is applied to the loan amount in the following instances:
  1. 1.
    Borrowing: Incurred at the time a user borrows funds.
  2. 2.
    Collection of Loan and Interest: After a borrower repays their loan, a fee is charged at the time the lender collects the repaid loan and accrued interest.
  3. 3.
    Liquidations: In cases where a loan is liquidated, a fee is applied to the transaction.

Example Calculation

For a loan with a value of 3,000 ADA:
  • Fee for Borrowing: 3,000 x 1% = 30 ADA
  • Fee for Loan Collection: 3,000 x 1% = 30 ADA
  • Fee for Liquidation: 3,000 x 1% = 30 ADA

Impact and Rationale

Alignment with CHRY Incentives

The 1% fee directly fortifies the CHRY incentives framework. By imposing this fee, CherryLend discourages users from creating artificial loan transactions to exploit the CHRY rewards system. This ensures that the rewards are distributed to genuine participants, enhancing the integrity of the CherryLend community.

CherryLend DAO and CHRY Stakers

The revenue generated from these fees is directed entirely to the CherryLend DAO. This alignment with the DAO's objectives ensures that fee revenues are used for the platform's and community's benefit.
Distribution to CHRY Stakers
  • Revenue Sharing: CHRY stakers receive a portion of the collected fees, creating a direct financial benefit for their participation in the ecosystem. CHRY staking is expected to go live 1 month after our mainnet is deployed.
  • Governance and Decision Making: Stakers play a pivotal role in governance, influencing how these funds are utilized for platform development and community initiatives.

Conclusion

The fee structure at CherryLend is a cornerstone of our platform's economic model. It not only supports the sustainability of the CHRY incentives but also reinforces the integrity of our transaction processes. By directing these fees to the CherryLend DAO and subsequently distributing them to CHRY stakers, we ensure a continuous cycle of reinvestment and reward within our community. This approach reflects our commitment to creating a balanced and robust lending and borrowing ecosystem for our users.