# Fee Structure

When using Optimex Borrows, three types of fees may apply:

### <mark style="color:orange;">1. Network Fee (Blockchain Transaction Fee)</mark>

* **What It Covers:** Cost for processing blockchain transactions.
* **Factors Impacting the Fee:**
  * **Network Congestion:** Higher traffic results in increased fees due to competition for block space.
  * **Transaction Size:** Larger transactions need more block space, leading to higher fees.
* **Who Pays It:** The borrower pays this fee directly to blockchain miners or validators. Optimex does not receive any part of this fee.

### <mark style="color:orange;">2. Loan Initiation Fee</mark>

* **What It Covers:** Charge for processing every loan disbursement.
* **Fee Calculation:** 0.1% of the borrowed amount.
* **Example:**
  * Maximum borrowing power: 100,000 USDC
  * Requested drawdown: 10,000 USDC
  * Loan initiation fee: 0.1% of 10,000 USDC = 10 USDC
  * Total debt: 10,010 USDC (loan amount + fee)
  * Optimex retains the 10 USDC fee. Borrower receives 10,000 USDC and owes 10,010 USDC, with interest on the full amount.

### <mark style="color:orange;">3. Liquidation Fee</mark>

* **What It Covers:** Fee when the loan becomes under-collateralized.
* **Fee Calculation:** Determined by Morpho's Lending Market based on current Loan-to-Value (LTV) ratio and liquidation threshold.
* **Liquidation Process:**
  * Entire BTC collateral is sold into USDC.
  * Sale proceeds are used to repay the debt and cover the liquidation fee.
  * Borrower receives any surplus funds in USDC, not BTC.


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