Protocol Fees
What is Protocol Fees?
Protocol fees are a kind of cost paid for using a DeFi protocol’s services in the DeFi environment. This charge, which is often just a small share of the transaction value, is meant to pay the platform for enabling the trade and upholding protocol.
Users encourage network validators to handle transactions and assist in preventing spam and other harmful activity on the network by paying fees. Also, users may exchange assets without having to own a specific quantity of native tokens thanks to a predetermined fee percentage, which improves the entire procedure and increases convenience for both parties.
Understanding of Protocol Fees
Protocol fees can be used to finance platform upkeep and growth, provide liquidity providers with rewards, and reduce the possibility of market manipulation. To boost the value of the token for holders, PancakeSwap, for example, uses a part of the protocol fees to burn and purchase back CAKE tokens.
Latest news about Protocol Fees
- Circle has introduced Perimeter Protocol, an open-source protocol designed to streamline credit transactions on the internet. The protocol consists of smart contracts built on open standards, facilitating secure and transparent capital exchanges on public networks. The protocol is the first contribution by Circle Research, which aims to integrate real-world assets and un- or under-collateralized loans into a protocol offered as a public utility. It can accommodate a wide range of credit use cases, from invoice factoring for small and medium-sized enterprises to institutional crypto credit for trading opportunities. The protocol operates without fees and does not require a native token, allowing builders and developers to build on a shared public infrastructure to enhance existing markets.
- Stroom Network, a liquid staking protocol on Bitcoin’s Lightning Network, has secured $3.5 million in seed funding from Greenfield Capital. The protocol provides channel liquidity in BTC to the Lightning Network, allowing stakers to earn fees using yield-bearing DeFi-enabled lnBTC tokens on the Ethereum platform. Stroom’s foundation is based on the Lightning Network’s potential as a next-gen payment rail with real-time settlement, horizontal scalability, low fees, and instant payments.
Disclaimer
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About The Author
Viktoriia is a marketing researcher and copywriter with a background in international relations. Her professional portfolio includes the writing of research papers focused on the import and export of products to Europe and Asia. Proficiency in the Chinese language and the time she has spent in China have extended her capabilities to master not only European markets but also those in China and Singapore. While currently living in Italy, Viktoriia continues to deepen her knowledge and skills in marketing and copywriting. Her experience allows her to perform analytical work and create texts on a diverse range of topics, ensuring accessibility to a broad audience.
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Viktoriia is a marketing researcher and copywriter with a background in international relations. Her professional portfolio includes the writing of research papers focused on the import and export of products to Europe and Asia. Proficiency in the Chinese language and the time she has spent in China have extended her capabilities to master not only European markets but also those in China and Singapore. While currently living in Italy, Viktoriia continues to deepen her knowledge and skills in marketing and copywriting. Her experience allows her to perform analytical work and create texts on a diverse range of topics, ensuring accessibility to a broad audience.
