K2K2

Fees

Reserve Factor (Interest Fee)#

A percentage of all interest earned by suppliers is directed to the protocol treasury.

  • Typical value: 10 to 20%
  • Who pays: Effectively shared between borrowers and suppliers. Borrowers pay the full rate; suppliers receive the rate minus the reserve factor.
  • When charged: Continuously, as interest accrues.

Example: Borrow rate is 10%, reserve factor is 10%. Suppliers receive 9% APY and 1% goes to the protocol.

Flash Loan Premium#

A flat fee charged on every flash loan.

  • Default: 30 basis points (0.30%)
  • Who pays: The flash loan borrower.
  • When charged: At repayment, added to the required repayment amount.

Example: Flash borrow 1,000,000 USDC. Premium = 3,000 USDC. You must repay 1,003,000 USDC.

Liquidation Protocol Fee#

A portion of the liquidation bonus is claimed by the protocol.

  • Default: 0% (currently no protocol fee is charged on liquidations)
  • Who pays: Deducted from the collateral before transfer to the liquidator.
  • When charged: During each liquidation event.

Collateral Swap Fee#

A protocol fee applied when collateral is swapped from one asset to another.

  • Default: 50 basis points (0.50%) on the main market. No collateral swap fee is charged on the isolated (xSolv) and Earn markets.
  • Who pays: The user performing the collateral swap.
  • When charged: At execution of the collateral swap.

What K2 Does Not Charge#

  • No deposit fees. Supplying assets is free.
  • No withdrawal fees. Withdrawing your assets costs nothing beyond the standard Stellar transaction fee.
  • No repayment fees. Repaying debt has no additional charge.
  • No lock-up penalties. No fees for early repayment or withdrawal.

Stellar Network Fees#

Every transaction on Stellar requires a small fee paid to the network, not to K2. These fees cover the computational cost of processing your transaction on-chain, similar to gas fees on other blockchains. In practice they are tiny, typically fractions of a cent, and are paid automatically from your wallet when you initiate any action such as supplying, borrowing, repaying, or withdrawing.

Where Do Fees Go?#

All protocol fees are collected in the Treasury contract. The treasury address is configured by the pool admin and can be a multisig account for added security. Treasury funds can be used for protocol development, security, and maintenance.

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