# Protocol Fee & Dynamic Trading Fee

## Dynamic Trading Fee

#### Charged in favor of LPs

The dynamic trading fee would be charged when users trade long/short or add/remove liquidity on iGain, The way to charge it can be adjusted according to the needs.

The fee can be increased or decreased over time, or a fixed percentage can be charged. Different financial products will have different settings.

For instance, if someone purchases 1000 Long by 500 DAI with a 0.5% dynamic trading fee, 500 \* 0.5% = 2.5 DAI will be charged as Liquidity Providers' fee income.

## Protocol Fee

#### Charged in favor of the iGain protocol

A 1% protocol fee will be charged whenever underlying tokens (DAI, ETH, yDAI, etc.) redemption happens in the system. Protocol fee before and after expiration are the same.

For example, redeeming 100 DAI will be charged 1 DAI as a protocol fee, and end up receiving 99 DAI.

### Specifically, protocol fee will be charged in the below scenarios:

* Exchange Long/Short tokens into DAI in advance
* Remove liquidity (exchange LP token into DAI) in advance
* Redeem DAI with Long/Short/LP tokens after expiration

### &#x20;<a href="#c4c9" id="c4c9"></a>


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