# Protocol Fees {% hint style="success" %} The protocol will have different fees, as described below. {% endhint %} 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. --- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter: ``` GET https://hedgehog-protocol.gitbook.io/main/how-it-works/protocol-fees.md?ask= ``` The question should be specific, self-contained, and written in natural language. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.