💱Protocol Fees

The protocol will have different fees, as described below.

Hedgehog introduces a fee structure centered around outcome efficiency and market health. In every market, whether it’s BaseFee, BTC tx fees, or MEV priority spreads, all winning positions incur a trading fee upon settlement.

This approach aligns incentives across all participants:

• Winners contribute back to the system, ensuring continuous liquidity and protocol sustainability.

• Losers pay nothing beyond their loss, preserving fairness and encouraging participation even in high-frequency or short-term markets.

By applying fees only to profitable outcomes, Hedgehog mirrors the logic of options settlement and prediction markets, rewarding successful hedges and speculations, while maintaining a lean, self-sustaining market design.

The collected trading fees are distributed across the ecosystem:

• A portion goes to liquidity providers and market makers, incentivizing continuous depth and tight spreads.

• Another portion funds protocol operations and future market expansions, such as upcoming FeeM auctions and MEV hedging instruments.

This “fee-on-success” model transforms Hedgehog into a positive-sum ecosystem: every win funds the next opportunity, creating perpetual liquidity and reinforcing the market’s predictive accuracy over time.