Every other perp dex is now advertising "zero fees" in their hero copy. It is the most overused claim in crypto. Some of it is real. Most of it is marketing. The honest answer to "does a zero-fee perp actually exist" is: yes, sort of, on specific dimensions, and the structure matters more than the headline.
This post is the no-bs decomposition. What does "zero fee" actually mean, where does the money come from if not fees, and how do you tell a structurally honest zero-fee venue from a sleight-of-hand one.
the simple definition
A zero-fee perp is a perpetual trading product that does not charge an explicit trading fee on at least one of the standard fee surfaces. The standard surfaces are: open fee, close fee, funding rate, borrow fee, and spread mark-up. A venue that calls itself "zero fee" usually means it has waived at least one or two of those, not all five.
There is no perp anywhere that is truly free across every surface. Liquidity costs money to provide. Settlement costs money. The question is who pays, when, and how it is disclosed.
how it actually works
On a typical perp venue, you encounter five different cost surfaces. A "zero-fee perp" zeroes out one or more of them and earns its keep elsewhere.
- Open fee: a percentage of notional paid when you open a position. Often 0.05% to 0.1%.
- Close fee: a percentage of notional paid when you close. Same range.
- Funding rate: peer-to-peer payment between longs and shorts. Not a platform fee, but it affects p&l.
- Borrow / utilization fee: a fee paid to the liquidity pool for using its capital, scaling with utilization. Common on GMX-style pools.
- Spread mark-up: the difference between the venue's execution price and the true mid. Often hidden inside "best execution" rhetoric.
A platform marketing "zero fees" might zero out (1) and (2), and earn entirely on (3), (4), or (5). That is still a real reduction in cost for many traders, but it is not "free trading".
where the money actually comes from
There are four sustainable ways to run a zero-fee or near-zero-fee perp.
- Charge a share of the funding rate to the platform. Some venues skim a portion of funding payments.
- Earn a spread on the index price. Tiny mark-up baked into execution that the user never sees as a "fee".
- Take a cut of net winnings. The platform earns only when traders win, scaled to the winning amount.
- Subsidize from a token or treasury. Common during launch periods. Not sustainable long-term without one of the above.
why it matters for traders
For a typical retail degen, the fee surface that matters most is the open fee and the close fee. A 0.1% open + 0.1% close on a 100x position is 0.2% of notional, which is 20% of your margin. That is a massive drag on small, high-leverage trades. Reducing that to zero is genuinely valuable.
- Short, high-leverage sessions benefit the most from zero open/close fees. The position turnover is the cost center.
- Long-held positions benefit more from low funding and borrow fees. The time component is the cost center.
- Big-size positions are most sensitive to spread mark-up. A 5 bps execution slip on a 1m position is 500 USDC every entry.
Read your own behavior. If you turn over positions twenty times a day at 100 USDC each, open/close fees dominate. If you hold one position for three days, funding dominates. "Zero fee" only matters if it is zero on the surface you actually use.
common misconceptions
A few claims that are usually misleading.
- "Zero fee means I trade for free." Usually no. It means one or two surfaces are zero. Check the rest.
- "Zero fee venues lose money on every trade." Usually no. They earn on a surface most traders do not look at.
- "Zero fee means it is a scam." Not necessarily. Plenty of legitimate venues use a different revenue model than open/close fees.
- "All on-chain perps are higher-fee than CEX perps." False. Some on-chain perps now compete favorably on fees, especially after rebates and incentives.
- "Zero fee on losses is the same as zero fee on opens." Not at all. Different surfaces, different incentive implications.
what to actually look for in a zero-fee perp
A practical checklist before you trust the marketing.
- Read the fee schedule for all five surfaces. If any are hidden behind "varies", ask for current numbers.
- Check spread vs an oracle price (Pyth, Chainlink). If the venue execution price is 5+ bps off the oracle, you are paying a spread.
- Check the funding rate vs other venues for the same pair. Big skew suggests the platform is taking a cut.
- Check whether incentives are subsidizing fees. Look at the venue's token emissions schedule. If incentives end, fees might appear.
- Check what happens when you lose. If the platform earns nothing on losses, that is the structurally cleanest version of "zero fee".
the cleanest "zero fee" structure: zero on losses
The most structurally honest version of zero-fee is one specific phrasing: zero fees on losses. The reason this matters is incentives. A platform that earns nothing on losses cannot benefit from grinding traders to liquidation. It has to want traders to keep trading and occasionally win. That is the only version of "zero fee" that aligns the platform with the trader's actual outcome.
where uponly.win fits in
uponly.win runs the zero-on-losses version of the zero-fee model. Specifically:
- Zero fees to open a trade. No open fee, no spread mark-up that we add on top of Avantis.
- Zero fees on losses. If you blow up, we earn nothing on that session.
- A small variable cut on net winnings only. That is the entire revenue model.
The reason we can do this is because we are not the counterparty. We do not run a book. Trades route to a real on-chain perp on Avantis and the market is the counterparty. Our incentive is to keep you sessioning long enough to occasionally win, because that is the only path to revenue. Read hit.one vs uponly.win for how this contrasts with house-style arcades, and is uponly.win actually safe for the deeper trust question. The button is at uponly.win.