How Do the Fees from a Liquidation Order Get Classified? ⎊ Path

How Do the Fees from a Liquidation Order Get Classified?

The fees from a liquidation order are typically classified as taker fees, as the liquidation engine executes a market order that 'takes' liquidity from the order book. Additionally, a separate liquidation penalty fee is often applied.

These fees are then split between the insurance fund, the liquidator (in some DEX models), and the exchange's revenue.

How Does the Gas Fee Structure Affect a Liquidator’s Profitability?

What Is a Liquidation Penalty and Who Receives the Fee?

What Is a “Maker-Taker” Fee Structure Common on Centralized Exchanges?

How Does the ‘Maker-Taker’ Fee Model Impact the Trading Volume Used in VWAP Calculation?

What Role Do External Liquidator Bots Play in Maintaining the Solvency of a DEX?

How Does the Liquidation Penalty Contribute to Platform Solvency?

What Role Do Maker-Taker Fees Play in the Profitability of Arbitrage Strategies?

Differentiate between Taker and Maker Fees in a Futures Market

Glossar

Liquidation Penalty Fee

Liquidation ⎊ The imposition of a liquidation penalty fee within cryptocurrency derivatives, options trading, and broader financial derivatives represents a consequence of margin calls exceeding available collateral, triggering automated asset sales to cover outstanding obligations.