> ## Documentation Index
> Fetch the complete documentation index at: https://docs.positions.finance/llms.txt
> Use this file to discover all available pages before exploring further.

# Protocol Fees

> Understanding protocol fees to using the platform efficiently.  

Positions Finance applies minimal, transparent fees to ensure protocol sustainability, reward contributors, and support ongoing development. Here's a breakdown of all current fee structures across the platform:

## Vault Rewards Fee

Whenever you earn yield from staking in a **Vault** (e.g., *Infrared Finance* or *Berachain Reward Vaults*), a **5% fee** is automatically deducted from the rewards **at the time of claiming**.

* **No fees on principal** — only on yield earned.
* Fee supports protocol operations and treasury growth.
* Example: If you earned 100 tokens, 95 go to you, and 5 to the protocol.

## Lend/Borrow Market Fees

### For Lenders:

When you supply assets to a lending pool, your yield comes from interest paid by borrowers. The protocol charges 20% fees that are deducted **from borrower payments**—not from your deposits.

<Note>
  **Note**: The **20% margin** affects borrower costs, not your deposit directly. What you see as **Supply APR is net after margin**.
</Note>

### Borrowing Interest Rate Model

Borrowing rates on Positions Finance are **dynamic** — they adjust based on how much of the available liquidity in a lending pool is being used. Additionally, a **0.1% opening fee** is charged on the borrowed principal (one-time per borrow action).

$Utilization = (Borrowed Liquidity) / (Total Supplied Liquidity)$

* As utilization increases, **interest rates rise**.
* This encourages balanced supply-borrow behavior and protects liquidity during high demand.

| Utilization % | Borrow APY behavior             |
| :------------ | :------------------------------ |
| Low           | Low, flat APY                   |
| Mid (\~80%)   | Gradual increase                |
| High (>90%)   | Sharp spike in APY to curb risk |

## Fee Structure Summary

| **Fee Type**           | **Rate** | **Applies To**                                 |
| :--------------------- | :------- | :--------------------------------------------- |
| **Lending Yield Cut**  | 20%      | Taken from borrower interest before lender APR |
| **Borrow Opening Fee** | 0.1%     | One-time fee on loan amount                    |
| **Vault Rewards Tax**  | 5%       | Taken from vault yield, not principal          |

<Info>
  *The protocol fee structure is subject to governance and may be updated as products and integrations evolve. Always check the UI or documentation for the latest rates.*
</Info>