Base Hourly Fee

The Base Hourly Fee is the main cost of maintaining a loan on Liqfinity, calculated by Sentinel AI to adapt to market conditions and prevent liquidation risks.

Key Features:

  • Market-Responsive Fees: Fees adjust based on market conditions—higher during significant price drops and lower during uptrends or sideways markets, especially when the market bottom/local bottom has been caught.

  • Average Cost: Loans typically cost around 8% monthly (based on our historical data) but may increase during volatile conditions. Liqfinity loans are best suited for low to medium-term strategies.

  • Universal Application: The Base Hourly Fee applies equally to all users, without tier favoritism, ensuring fairness and transparency. However, fees may vary for users borrowing on the same day.

For example, someone taking a $100k BTC loan at a market peak may experience higher fees if the price drops, while another user borrowing $90k BTC at a market bottom could benefit from lower fees as the price rises.

Options During Market Downturns:

  • Hold: Keep your position open without fear of liquidation and wait for recovery.

  • Close: Repay and reborrow later at better market conditions.

  • Exit: Walk away with borrowed funds, treating it as a sale to the platform.

This system provides borrowers with flexibility, fairness, and protection, even in volatile markets.

This fee is dynamically calculated by Sentinel AI, using advanced financial models like Black-Scholes and european options. The system adapts to market conditions, ensuring fair adjustments to protect users from liquidation while keeping the platform sustainable.

🧠 Why You Should Repay Hourly Fees Frequently on Liqfinity

When you borrow USDT against your crypto (like BTC), the Sentinel AI algorithm checks your position every hour. It looks at:

  • Your entry price (the price of BTC when you borrowed)

  • The current BTC price

  • Your accumulated fees

The algorithm calculates a "strike price" — basically, how much the BTC price needs to recover so you're at break-even.

🧮 Example (Simplified):

  • You bought BTC at $100,000

  • You borrowed $100,000 USDT

  • Now BTC drops to $85,000

  • Your accumulated fees are $10,000

Your strike price becomes $110,000 (because that’s what BTC needs to hit for you to break even — $100k original loan + $10k fees). The gap between the current price and strike price is now $25,000.

💸 Why This Matters:

The bigger the gap, the higher the hourly fees. The smaller the gap, the lower the fees.

So if you repay some or all of your fees regularly, you lower your strike price → which shrinks the gap → which means you pay less in future hourly fees.

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