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# Protocol Fee

In the current version (Pine Protocol V2), the fee structure is a simple flat fee of 0.01 ETH and 0.35% of the total loan amount paid by the borrower.
In V3, the fee structure has been re-designed to make the protocol more flexible and scalable. Please note that the follow fee structure will only be launched in late-Q4 2022.

### Fee Values

The Pine Protocol fees are governed by the PineDAO. As of September 2022, the values are:
 Interest Rate Spread minimum split % = 2% base = 10 Early Repayment Interest Discount % 50% of remaining interest fee payable Late Repayment Interest Multiplier 10X Liquidation Fee 25% Pine Listing Transaction Fee 0.3%

The Protocol charges an interest rate spread between the rate the borrower pays and the lender receives on every Transaction happens via the Protocol. The fee is determined algorithmically depending on the lender rate and pricing parameters of the Protocol.
$splitPercent = min SplitPercent + log(1+lenderRate, base)$
Based on current fee parameters set by the Pine Protocol as of September 2022

### Early Repayment Fee

In the event of early repayment (i.e. repaying all or any amount of the outstanding loan before the end of the term), the borrower is liable for any interest accrued up till that point of time. On the portion that is repaid early before the end of the term, the borrower is liable for a portion of the interest that is supposed to have accrued if the repayment is done at the end of the term. The portion is calculated using the Early Repayment Interest Discount %.

### Late Repayment Surchage

During the grace period after a loan has expired, the interest rate chargable would be equivalent to the original interest rate times the Late Repayment Interest Multiplier.

### Liquidation Fee

In the event of liquidation, the lender is charged a percentage, equivalent to the Liquidation Fee %, of the value of the NFT Collateral above the value of outstanding loan. Lenders would have to pay this fee when they withdraw the NFT collateral from the smart contract of the loan in default.
$liqFee = liqFeePercent * (currentCollateralValue - outstandingLoanAmount)$
The charge is waived in the case of liquidation at a loss when the value of the outstanding loan exceeds the value of the NFT Collateral.

### Pine Listing Fee

With Pine Listing (see Pine Listing for more information), borrowers can list their NFT for sale even when they are being used as collateral for loans. The protocol charges a Pine Listing Sales fee on the amount the NFT is sold for.