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Commissions

How Panoptic calculates commissions

Commission Fees
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In traditional brokerage firms, a fixed commission is charged when a position is opened AND closed. And with options, no commission is paid if the user allows the option to expire. A perhaps perverse incentive of this model is that users may keep their position open for longer because they do not want to pay that commission fee.

In Panoptic, since options never expire, commissions are only paid when a new position is minted. We believe that this will eliminate the impact of the commission fee on the user's decision-making process when closing a position.

Commission rate
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The value of the commission to be paid is the commission rate multiplied by the notional value of the option (i.e. the amount of token moved to/from the Uniswap pool). Note that the commission will always be paid in terms of the tokentype of the position: it will be paid using token0 for puts and token1 for calls.

commission = (notional value) * commissionRate()
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