Withdrawal Fee

Withdrawal Arbitrage” is able to drain fund from the pool and is harmful to the protocol’s long term financial health. To counter the attacks, there is a custom withdrawal fees mechanism.

In most cases, however, a very small withdrawal fee is already sufficient to prevent such an attack.

Assume the withdrawal amount is equal to 1% of the pool:

Cov Ratio	Withdrawal Fee
>= 1	-0.0000%
0.9	-0.0011%
0.8	-0.0093%
0.7	-0.0518%
0.6	-0.2731%

You can learn more about withdrawal arbitrage and the design on withdrawal fee here.