---
description: >-
  flow.lease uses a simple and fully on-chain fee model designed to discourage
  short-term deposits and ensure fair reward distribution.
---

# Fees

### Fee Components

#### 1. Liquidity Provider Deposit Fee

* When users deposit WAVES into the protocol and receive fWAVES tokens, a small protocol fee is deducted.
* The deducted fee portion is transferred directly to the protocol’s fee collector address.
* The remaining amount is fully converted into fWAVES and provided to the user.

**Formula**:

```
fWAVES minted = WAVES deposited × (1 - depositFeeBP / 10000)
```

**Example**:

* Deposit: 1000 WAVES
* Protocol fee: 0.5% (default 50 basis points)
* fWAVES minted:\
  1000 × (1 - 50 / 10000) = 995 fWAVES
* 5 WAVES (0.5%) are collected as the protocol fee.

#### 2. No Performance or Withdrawal Fees

* The protocol does not charge any performance fees on validator rewards.
* There are no fees charged during the withdrawal phase (users receive their full WAVES and accumulated rewards according to the exchange rate at withdrawal time).

#### 3. Administrative Fee (Configurable)

* The administrative deposit fee (`adminFeeBP`) is configured at protocol deployment.
* Current default value: 50 BP (0.5%).
* Fee adjustments require multisignature governance approval (admin multisig).
* All fee changes are fully transparent and recorded on-chain.

#### 4. Emergency Slashing and Penalties

* In case of emergency validator slashing, penalized validators lose their locked FLOW deposit entirely.
* Slashed FLOW is permanently burned and does not return to protocol revenue.

#### 5. Gas and Network Fees

* Users are responsible for covering Waves network transaction fees when submitting smart contract calls.
* These are native blockchain fees unrelated to protocol-level fees and depend on network conditions.

### Fee Flow Summary

| Action                 | Fee Charged                   | Recipient                                 |
| ---------------------- | ----------------------------- | ----------------------------------------- |
| Deposit WAVES          | Admin deposit fee             | Protocol treasury (fee collector address) |
| Withdraw WAVES         | No fee                        | User                                      |
| Validator Registration | No fee (requires FLOW stake)  | —                                         |
| Voting (FLOW locking)  | No fee                        | —                                         |
| Emergency Voting       | No fee                        | —                                         |
| Emergency Slashing     | FLOW burn (validator penalty) | Protocol burn                             |

### Transparency

* All fee collection, storage, and usage are fully on-chain and publicly auditable.
* fWAVES price growth automatically reflects validator performance, reward compounding, and leasing efficiency, without hidden fees or off-chain revenue capture.
