Fees

Every action feeds the snowball.

Snowball charges protocol fees on key user actions. These fees are distributed across $AVAX backing, bribes, and operational costs — forming the backbone of Snowball’s 'up-only' value mechanics.

🧊 Fee Structure

Action	Fee	Distribution
Minting	2.5% (on AVAX deposit)	65% → AVAX backing, 35% → Treasury + Bribes
Burning	2.5% (on AVAX redemption)	65% → AVAX backing, 35% → Treasury + Bribes
Loan Interest	Linear APR (6.9% annual rate)	65% → AVAX backing, 35% → Treasury + Bribes
Flash Loans	1.0% per tx	100% → Protocol Revenue

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💸 Looping Discount

When using one-click looping via the Snowball dApp:

• Minting fee is reduced from 2.5% → 1.0%

• Fee still follows the same 65/35 split

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📈 Interest Fees

Snowball uses a linear interest model with a 6.9% APR, charged upfront when initiating a loan.

Interest Formula:

Interest = Borrowed × (6.9% APR) × (Loan Days ÷ 365)

For example, borrowing 100 AVAX for 30 days:

Interest = 100 × 0.069 × (30/365) ≈ 0.567 AVAX

Minimum Fee Safeguard:

To prevent users from bypassing burn fees via short-term loans, Snowball enforces a minimum interest fee:

Minimum Fee = Burn Fee − Overcollateralization Buffer

If standard interest is below the minimum, the minimum fee applies instead.

Examples:

• 1-Day Loan → Min fee triggered (e.g., ~1.69 $AVAX on 100 $AVAX borrow)

• 365-Day Loan → Standard fee applies (e.g., 6.9 $AVAX)

This ensures borrowing isn’t cheaper than just burning $SNOW.