Does Liquity charge any fees?

Written by Nikola Milinkovic
Updated 1 year ago

Liquity charges a one-off fee whenever LUSD is borrowed, and when LUSD is redeemed:

  • For borrowers, there is a borrowing fee on loans as a percentage of the drawn amount (in LUSD).

  • For redeemers, there is a redemption fee on the amount paid to users by the system (in ETH) when exchanging LUSD for ETH. Note that redemption is separate from repaying your loan as a borrower, which is free of charge.

Please note that the borrowing fee is variable (and determined algorithmically) and has a minimum value of 0.5% under normal operation. The fee is 0% during Recovery Mode.

A 200 LUSD Liquidation Reserve charge will be applied as well, but returned to you upon repayment of debt. It is set aside as a way to compensate gas costs for the transaction sender in the event your Trove being liquidated. The Liquidation Reserve is fully refundable if your Trove is not liquidated, and is given back to you when you close your Trove by repaying your debt. 

DeFi Saver doesn't charge any additional as a frontend provider.

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