> For the complete documentation index, see [llms.txt](https://docs.42.space/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.42.space/getting-started/protocol-mechanics-101/fees.md).
# Fees
On 42's trade fees.
42 charges a **1.0% protocol fee** on each trade. An integrator fee is added on top. The app or integration that submits the trade sets this fee:
| Trade source | Integrator fee | Total fee |
| -------------------- | -------------- | --------- |
| 42 app | 0.4% | 1.4% |
| External integration | 0.6% | 1.6% |
Fees are incurred when users mint or redeem Outcome Tokens (OTs).
This protocol fee is separate from network gas fees, which are also paid in BUSDT from the proxy wallet during transaction execution.
### Mint Fee
For Mint transactions, the fee is calculated directly on the trade notional collateral deposited in exchange for the OT.
#### Formula
* **M** = Gross collateral from the mint
* **p** = protocol fee rate (1.0%)
* **i** = integrator fee rate
$$
MintFee = M × (p + i)
$$
{% hint style="info" %}
**Example:**\
\
Given a mint size of **100 USDT** in the 42 app, the total fee is $$100 \text{ USDT} \times 1.4% = 1.4 \text{ USDT}$$. An external integration charges $$100 \text{ USDT} \times 1.6% = 1.6 \text{ USDT}$$.
{% endhint %}
### Redeem Fee
Redeems first apply a **redeem tax** (refer to [Redeem Tax Explained](/getting-started/protocol-mechanics-101/42-outcome-tokens/market-discovery-pre-resolution.md#redeem-tax-explained)). The protocol and integrator fees are then charged on the **remaining collateral**.
#### Formula
* **R** = gross collateral from the redeem
* **τ** = redeem tax rate
* **p** = protocol fee rate (1.0%)
* **i** = integrator fee rate
$$
RedeemFee = R × (1 − τ) × (p + i)
$$
{% hint style="info" %}
**Example:**\
\
Given a redeem size of 100 USDT in gross collateral and a redeem tax rate of 5%, the total fee in the 42 app is $$100 \text{ USDT} \times (1-0.05) \times 1.4% = 1.33 \text{ USDT}$$. An external integration charges $$100 \text{ USDT} \times (1-0.05) \times 1.6% = 1.52 \text{ USDT}$$\
\
*\*Note: This ensures fees are only applied to the **net collateral returned from the pool**, not the taxed portion.*
{% endhint %}
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