> For the complete documentation index, see [llms.txt](https://docs.catapult.trade/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.catapult.trade/mechanics-turbo/fees.md).

# Fees

Fees are divided into a transactional trade fee and a performance-based settlement fee.

### Trade Fees (1% Notional)

Every buy and sell order incurs a 1% flat fee on the trade’s collateral value. This is split equally between the protocol, as the platform fee, and the token's originator, as the creator fee.

### Profit Fees (5% on P/L)

At settlement, a 5% fee is applied to the gross profit of winning positions; losing positions are exempt. A portion of this revenue is recycled into the ecosystem via reward pools distributed according to participant metrics to traders and mindshare posters.

### EV

While the underlying GBM engine has a neutral drift, the fee structure introduces a localized drag on the net expected value. The 1% collateral fee increases entry and exit costs while the 5% profit fee reduces the net magnitude of outlier wins.

Despite this, the engine is calibrated for extreme volatility where 10x or 100x moves are mathematically reachable. The fee structure remains thin enough that skilled traders can achieve positive EV by capturing high-volatility paths that outpace these participation costs.

### Edge

The edge scales with the volatility of the token tier, as higher volatility increases the expected reward and the subsequent impact of the 5% profit fee.