📖Open Fee

Squeeze is designed with flexibility in how fees work. Users can set their own fee policy when they deposit liquidity, but we also provide a default fee policy that can be used out of the box.

Our default fee policy scales with the amount of liquidity borrowed, using the integral of 1/x² to ensure larger borrowing actions incur higher fees as liquidity decreases. This was designed to prevent manipulation and encourage balanced usage of liquidity.

$$\text{open fee}(borrowed) = c\int_{total - lent - borrowed}^{total - lent}1/x^2dx$$

The open fee is added to the amount of liquidity that must be repaid, and does not go to the protocol—it is used to enhance the liquidity pool, ensuring thicker liquidity as leverage activity increases.