Protocol Fees

Synnax’s SyUSD stablecoin system is powered by a decentralized lending engine with a fee structure designed for stability, protocol reserves, and responsible borrowing incentives.

Each collateral pool (based on a specific asset) has its own fee structure — meaning fees may differ depending on which asset you are using as collateral.

You can view the current fee rates for each pool directly in the app:

Explore Tab → Select Collateral → See applicable fees and position details.

Fee Overview

Fee Type	How It’s Charged	Where to See	Notes
Opening Fee (formerly Mint Fee)	Once, at mint	Pool details	Fixed
Borrowing APY (formerly Interest Fee)	Continuous	Pool details	Dynamic, for peg management
Liquidation Penalty (formerly Liquidation Fee)	Upon liquidation	Pool details	Fixed
Redemption Fee (Coming Soon)	On redemption	(Future release)	Dynamic, for peg management

Opening Fee:

The Opening Fee is a fixed fee charged when a user opens a borrow position and mints SyUSD against their collateral.

How It Works:

• This fee is immediately added to your debt once the position is opened.

• Example: If the Opening Fee is 0.5%, minting 1,000 SyUSD results in an initial debt of 1,005 SyUSD.

• This is a one-time fee, not recurring.

Purpose:

The Opening Fee builds the Synnax Reserve — a protocol-level fund designed to reinforce system health and security over time.

Borrowing Rate (APY)

Definition:

The Borrowing Rate is a variable annualized fee (APY) applied to the outstanding SyUSD debt over time.

How It Works:

• Accrues continuously (every second) and compounds into your debt.

• If the Borrowing Rate is 10% APY and you hold your position for one year, you’ll owe approximately 10% more SyUSD.

• Holding a position for less time (e.g., 1 month) results in proportionally less accrued borrowing cost.

Purpose:

To ensure continuous yield generation for the protocol while encouraging responsible leverage and timely repayment.

Liquidation Penalty

Definition:

The Liquidation Penalty is a one-time penalty deducted from a user’s collateral when their position falls below the required collateralization threshold and is liquidated.

How It Works:

• If your position becomes undercollateralized, a portion of your collateral is forfeited to liquidators as an incentive for stabilizing the system.

• The penalty is automatically applied during liquidation events.

Purpose:

Liquidation penalties encourage users to manage risk and maintain healthy positions, while ensuring liquidators are motivated to act.

(Coming Soon) Redemption Fee

Definition:

A Redemption Fee will be introduced in future protocol upgrades to apply when users redeem SyUSD against collateral from other users’ positions.

Planned Mechanics:

• Low Redemption Fee encourages redemptions and helps tighten the SyUSD peg.

• High Redemption Fee discourages redemptions, protecting the health of Pool during stressed conditions.

Purpose:

The Redemption Fee will be a key lever for dynamic peg management and protocol stability.

Key Notes

• Each collateral pool has its own fee settings.

Fees for Opening, Borrowing, and Liquidation can differ based on the risk profile of the asset.

• Users can always preview fees live before opening a position by using the Explore interface in the app.

• Synnax reserves the right to adjust fee parameters dynamically as part of active risk management and peg stabilization strategies.