Utility | Fees
Current bridges in the space offer nascent technology which are focused on stablecoins. Altitude’s vision is to bridge the gap by offering a solution for transferring blue chip digital assets between different blockchains.
Liquidity providers are able to stake into single-sided asset pools with zero impermanent loss while collecting fees from inbound transfers.
To support the protocol and ensure longterm utility, Altitude uses two different methods of calculating transaction fees
a) Protocol Fee: Every time a user withdraws liquidity across chains through a transfer a 0.025% fee (2.5 basis points) is incurred.
Every time a transfer removes liquidity from a liquidity pool, a 0.025% protocol fee is collected on the transfer. Thereafter, 100% of the fee is collected by the treasury and then sold to buy-back and distribute ALTD to the protocol treasury governed by gALTD holders
e.g.: John has 10 ETH on Polygon he wishes to use on Ethereum. He visits Altitude and initiates a swap. Within one transaction, John deposits 10 ETH to the ETH liquidity pool on Polygon. With a second transaction, John receives 10 ETH on Ethereum less the fee of 0.0025 ETH.
Note: LP Token staking rewards only ensure an initial liquidity on both sides. Over time, the liquidity might shift to one side. That does not directly affect the LP Tokens or staking rewards!
b) Rebalancing Fee: When there is an imbalance between Liquidity Pools, a rebalancing fee is taken when transferring from the high liquidity side to the low liquidity side (decreasing liquidity on the low side). That fee gets collected in a reward pool on the low liquidity side and is awarded when transferring from the low liquidity side to the high liquidity side (increasing liquidity on the low side). The greater the imbalance, the greater the fee.
Altitude uses the same rebalancing framework from Stargate Protocol, which can be referenced below, with exception to a slightly higher λ 2 hyperparamter with a value of 99.6%.
Altitude uses 99.60% not 99.54% on our system, as the protocol fee is deducted before applying the rebalance fee. Altitude performs both fee calculations on the full swap amount.
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