Fees

Dahlia implements a variety of fees that help sustain the protocol, ensure market stability, and incentivize certain behaviors within the ecosystem. Below are the core fees associated with Dahlia markets:

Protocol Fee

Applied to each market, deducted from the borrower's APY, and directed to the DAO treasury.

• Default: 5% of the interest rate earned by lenders.

• Maximum: The protocol fee rate is capped at 30%.

Reserve Fee

Provides a safety buffer in the event of bad debt. Collected from borrowers and directed to a reserve or insurance buffer.

• Default: 0%.

Flashloan Fee

Applied whenever users use Dahlia's flashloan functionality. Flashloans allow borrowing without collateral, provided the funds are returned in the same transaction.

• Default: 0%.

• Maximum: Capped at 3%.

These fees can be adjusted by governance and are collected to ensure the protocol maintains sustainability, supports development, and provides safety mechanisms for market participants.