Protocol
Fees
UNDO plans one fee of 0.5% of each protected payment, paid by the seller, or 0.35% with $UNDO staking. Buyers pay no protocol fee.
The fee
UNDO plans one protocol fee.
| Item | Planned value |
|---|---|
| Protocol fee | 0.5% of each protected payment |
| Paid by | the seller |
| With $UNDO staking | 0.35% |
| Fee for the buyer | none |
| Assets | USDC and EURC |
The fee is taken by UndoPay when the payment is made. It is the same in both lanes and on both routes, instant payout or escrow fallback.
Examples
| Payment | Fee at 0.5% | Fee at 0.35% |
|---|---|---|
| 20 USDC | 0.10 USDC | 0.07 USDC |
| 180 USDC | 0.90 USDC | 0.63 USDC |
| 2,500 USDC | 12.50 USDC | 8.75 USDC |
Lea sells a 180 USDC ceramic set. She pays a 0.90 USDC fee. If she stakes $UNDO, the fee on the same sale is 0.63 USDC.
In the Agent lane the fee applies to each paid call. An agent that spends a full 5 USDC session costs the seller 0.025 USDC in fees at 0.5%.
Where the fee goes
Where the 0.5% fee goes
paid by the seller, in USDC or EURC
50%Arbitrators
Paid for resolving disputes
30%Guarantee Pool / treasury
Third layer of the refund waterfall, phase 2
20%Buyback to stakers
Market buyback, sent to $UNDO stakers
| Share | Destination | Purpose |
|---|---|---|
| 50% | Arbitrators | Pays the people who decide contested disputes |
| 30% | Guarantee Pool and treasury | Builds the phase 2 backstop and funds the protocol |
| 20% | Market buyback sent to stakers | $UNDO bought on the market and distributed to stakers |
On a 0.90 USDC fee, that is 0.45 USDC, 0.27 USDC and 0.18 USDC.
The Guarantee Pool is phase 2 and subject to legal review. How the 30% share is divided between the pool and the treasury is not decided. See Guarantee Pool.
Other costs
The protocol fee is not the only amount that can move.
| Cost | Who | Amount | Returned |
|---|---|---|---|
| Gas | Whoever sends the transaction | paid in USDC | No |
| Dispute deposit | Buyer | 2% of the amount, minimum 1 USDC | Yes, if the buyer wins |
| Appeal deposit | The appealing party | doubled deposit | Depends on the outcome |
| Bond | Seller | chosen by the seller | It stays the seller's, minus refunds for lost disputes |
Deposit examples: a 180 USDC payment needs a 3.60 USDC deposit. A 20 USDC payment needs 1 USDC, because the minimum applies.
A bond is not a fee. It remains the seller's money. It can be withdrawn when no exposure is open against it.
Yield on idle bonds
Idle bonds are designed to earn USDC yield on Arc lending markets. The seller keeps 90% of that yield.
Yield is variable and can be zero. Lending markets carry their own risk. UNDO does not quote a rate and does not promise any return. A seller should not count on yield to offset fees.
The staking discount
A seller who stakes $UNDO pays 0.35% in place of 0.5%. The amount of stake required is not decided.
Staking is optional. You will never need $UNDO to pay or to get paid. Payments, bonds and fees stay in USDC and EURC.