Protocol fees

Vault owners provide REP-backed security capacity, maintain vault health, and may need to participate in reporting and migration. In return, fee-eligible capacity ownership earns a share of the time-based fees charged to outstanding complete-set collateral.

Complete-set collateral gradually decays into an unallocated fee reserve. Fee-eligible vaults accrue fees in proportion to their assigned capacity ownership. The retention rate falls as utilization rises, so security becomes more expensive as open interest consumes underwriting slack.

Retention follows a piecewise heuristic: the per-second retention rate declines linearly as utilization grows and stops declining once utilization passes a dip point, so the annualized fee rises from its floor to its ceiling and then holds; the SecurityPool reference prints both rates. The SecurityPool reference lists the on-chain constants and the formula clients use to annualize the rate.

Retention and utilization curve. The annualized fee rises from its minimum at zero utilization to its maximum at the dip point, then remains flat.

Annualized fee against utilization. Past the dip point the per-second retention rate is already at its minimum, so the fee stops rising.

Fee accrual is lazy: state-changing pool operations checkpoint the global fee index, and vault operations checkpoint each vault against that index. Fractional amounts remain in explicit remainders until they accumulate into whole attoETH, so callers do not need to iterate over every vault when time advances.

Fee accrual is time-clamped. An initial pool accrues until its question ends or its universe forks. A child starts a new epoch when migration and any Truth Auction finalize, then accrues until local resolution or another fork; a child with a fixed outcome and no continuation game accrues no further fees.

Migrated capacity and sold auction capacity enter the fee denominator at finalization, even when a winning bidder claims later. The pool preserves each owner's accrued share while assigning late claims and reconciling rounding remainders. See the subsystem guardrails for checkpoint and fork-reconciliation sequencing and the SecurityPool contract reference for exact state transitions.