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Trading fees

TACO markets charge fees on trades. Exact behavior depends on the market type. Event market fees depend on active tranches and can change when the active liquidity set changes. Price market fees can include a base rate, imbalance adjustment, and optional staking discount.

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LP rewards

LP rewards come from fee allocation, not from guaranteed yield. The reward path differs by market type:
  • Event LP fees accrue to the tranche accounting system.
  • Price LP fee sharing can use separate fee-pool accounting and non-transferable LP reward tokens.
For price markets, only opted-in fee-share liquidity receives that trading-fee reward stream. A liquidity lot can still back the pool without participating in fee sharing. On markets that enable funding, trader-paid funding is a second income stream: it accrues to active LP lots and raises their redeemable value, separate from the opt-in trading-fee rewards. Remember LPs are the counterparty to traders — see Price market liquidity for how redemption value can fall below your deposit.

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Protocol fees

Part of trading fees may go to the protocol treasury. This reduces the amount distributed to LPs. Some price markets can also route a configured share of trading fees to a market creator vault. The app should show the effective fee quote before you sign.

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Staking discounts

Some price market deployments can use TACO staking to compute a virtual vTACO balance and apply fee discounts. Discount availability depends on the connected chain and configured contracts. If the discount module is unavailable or not configured for a market, trades can fall back to the undiscounted fee rate.

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What to verify

  • Is this market event or price?
  • Are rewards automatic or claimed manually?
  • Is there a lock period?
  • Does the fee quote include discounts?
  • Is the reward UI using live contracts or demo data?