> For the complete documentation index, see [llms.txt](https://docs.premia.blue/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.premia.blue/the-premia-protocol/governance/voting-vxpremia/vxpremia-rewards/protocol-commissions.md). # Protocol Commissions Under Construction ## **Premia Blue (V3) Protocol Fees:** * Three layers of fees: Base, Margin, and Vault. * **Base Layer** amasses commissions from the greater of either 3% of premiums paid or 0.3% of the notional value transacted. On Settlement, a fee of 0.3% is collected, not to exceed 12.5% of the option's value. (Rates subject to change by vote) * **Margin Layer** is a two-part equation. Firstly, it subtracts 0.4% from the Prime Rate (driven by supply and demand dynamics) charged to providers of margin lending liquidity. Secondly, it levies a 15% fee on users' liquidated positions. (Rates subject to change by vote) * **Vault Layer** includes a 2% per annum management fee and a 20% fee on all positive returns for all native vaults (built in-house). (Rates subject to change by vote) * For Vaults developed by third parties, fees will be negotiated ad-hoc on a case-by-case basis. * Distribution of fees to Staking Users (vxPremia), Premian Republic, and the Insurance Fund. * **Staking Users** are allotted 80% of Base Layer fees. * The **Operator Group** receives 20% of Base Layer fees. * The **Insurance Fund** collects 100% of the fees from the Vault and Margin Layers. * Parliament will reconvene every January to re-access the allocations and amend, any changes will be submitted for a vote before any action is taken. The first meeting will be January 2024. Premia V2 Protocol Fees: Premia charges a 3% Protocol Fee to option buyers and a 2.5% Utilization Fee to LPs. 80% of fees are paid to $PREMIA staking users. #### Premia Classic (V2) Fees Below: Upon creation of a trade on the platform, a taker fee is currently charged: * Taker Fee - 3% of option premium applied at option creation Currently, upon settlement of any trade, a utilization fee is captured. * Utilization Fee - 2.5% annual interest fee applied at settlement based on length & size These fees are collected on a source chain level (chain independent), and allocated to vxPREMIA holders on a pro-rata basis of their percentage influence on that source chain. --- # Agent Instructions This documentation is published with GitBook. GitBook is the documentation platform designed so that both humans and AI agents can read, navigate, and reason over technical content effectively. Learn more at gitbook.com. ## Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation by asking a question. Perform an HTTP GET request on the following URL with the `ask` and `goal` query parameters: ``` GET https://docs.premia.blue/the-premia-protocol/governance/voting-vxpremia/vxpremia-rewards/protocol-commissions.md?ask=&goal= ``` `ask` is the immediate question: it should be specific, self-contained, and written in natural language. `goal` is what the user is ultimately trying to achieve, the reason they need the answer. Sharing it helps GitBook give you a better, more relevant answer. A goal is most helpful when it describes the outcome the user wants rather than restating the question. For example, with `ask=how do I create an API token`, a goal like `automate deployments from our CI pipeline` lets GitBook tailor the answer to that use case. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.