Waterfall
  • Introduction
    • What is Waterfall?
    • Motivation
  • Mechanism
    • Overview
    • Participants
    • Shards (ERC-1155)
    • Pricing NFTs for Buyouts
    • Fees
  • Resources
    • Contracts
    • External Links
Powered by GitBook
On this page
  1. Mechanism

Fees

PreviousPricing NFTs for BuyoutsNextContracts

Last updated 1 year ago

When shard traders place predictions by trading , they must pay an upfront fee. Upon placing a prediction, this fee is distributed to the corresponding seller and the Waterfall protocol.

The reason for a fee is to prevent situations like the . For example, suppose there was no fee, and a user selects an extremely high predict price after purchasing a shard. This would prevent a buyout from happening and effectively lock the NFT in the protocol since no buyer will match the unrealistic price that has been set.

Similarly, suppose a user sets an expiration date extremely far into the future. If the NFT were to drop in demand and/or value, the NFT would get locked up until the after expiration date (when the Dutch auction starts).

Thus, the size of the fee is dependent on both the predict price and expiration date.

shards
monopoly problem