> ## Documentation Index
> Fetch the complete documentation index at: https://docs.sporttoken.app/llms.txt
> Use this file to discover all available pages before exploring further.

# Overview

# Fee Structure Overview

SportToken uses a transparent, risk-based fee model designed to keep the vault profitable while offering competitive pricing to bettors.

## Fee Components

Every bet has two potential fee components:

| Fee Type       | Rate         | Purpose                                 |
| -------------- | ------------ | --------------------------------------- |
| **System Fee** | 0.3% base    | Platform operation costs                |
| **Market Fee** | 0-3% dynamic | Risk management based on vault exposure |

## Key Principles

1. **Risk-Proportional Pricing** - Fees scale with how much risk your bet adds to the vault
2. **Rebates for Derisking** - Bets that reduce vault exposure can earn rebates instead of paying fees
3. **Hard Caps** - Maximum 3% exposure per side prevents catastrophic losses
4. **Transparency** - All fees are shown before you place your bet

## Quick Examples

**Low-risk bet (balancing the market):**

* Market is heavy on Team A
* You bet on Team B (the underbet side)
* Fee: 0.3% system fee + potential rebate

**Higher-risk bet (adding to imbalance):**

* Market is heavy on Team A
* You also bet on Team A
* Fee: 0.3% system fee + 1-3% market fee (depends on exposure level)

***

## Rebates Explained

**Rebates are the opposite of fees** - when your bet helps the vault, you get paid.

### How to Earn Rebates

1. **Find imbalanced markets** - Look for games where one side has heavy action
2. **Bet the underbet side** - Your bet reduces vault risk
3. **Earn a rebate** - Proportional to how much risk you removed

### Rebate Math

```
Net Cost = System Fee (0.3%) - Rebate
```

If the rebate exceeds 0.3%, **you profit just by placing the bet** (before the game even starts).

### Example: Profitable Bet Placement

* Vault has 2% exposure on Team A
* You bet \$1,000 on Team B
* Rebate rate: \~1.5%
* Rebate: \$15.00
* System fee: \$3.00
* **Net: You earn \$12.00** + your normal bet payout if you win

### Where Rebates Apply

| Market Type    | Rebates Available?             |
| -------------- | ------------------------------ |
| Binary (2-way) | ✅ Yes                          |
| 3-Way (Soccer) | ✅ Yes                          |
| Parlays        | ❌ No (fees compound instead)   |
| Cashouts       | ✅ Yes (when reducing exposure) |

Rebates make SportToken unique - you can actually get paid to take positions that help balance the market.