# Trading Fees

GSOL charges a fee when opening and closing positions. This fee is calculated based on the position size (not collateral) and may very depending on market conditions.

* Applied on both position increase and decrease
* Can be dynamic to manage risk and market imbalance

### Price Impact

Trades may incur a price impact adjustment depending on how they affect market balance.

* Trades that increase imbalance pay higher costs
* Trades that reduce imbalance receive better pricing

This mechanism helps maintain equilibrium between long and short positions.

### Funding Fees

GSOL uses a funding mechanism to balance open interest between longs and shorts.

* The dominant side pays the minority side
* Rates adjust dynamically based on market imbalance
* Encourages a balanced market over time

### Borrow Fees

A borrow fee may apply depending on pool utilization.

* Higher utilization → higher fees
* Designed to prevent excessive leverage and protect liquidity

### Liquidation Fees

When a position is liquidated:

* A liquidation fee is charged
* Used to cover execution costs and maintain system stability

### Fee Distribution

Fees generated by the platform are distributed to:

* Liquidity Providers (LPs) — as rewards for providing capital
* Protocol Treasury — for sustainability and growth