Fees

Fabrica's fee structure is designed to minimize friction for property owners while ensuring sustainable operation of the protocol and validator network.

Fee Structure Overview

Fees in the Fabrica ecosystem are determined at different levels:

On-Ramp Fees

On-ramp fees cover the cost of tokenizing a property, including:

• Title review and verification
• Document preparation and notarization
• County recording fees
• NFT issuance

Key principle: On-ramp fees are determined and authorized when the property is on-ramped, but are only charged when the token is first used in a transaction (selling or borrowing). This approach:

• Lowers friction for property owners exploring tokenization
• Charges users only when they see utility in the product
• Aligns incentives between the protocol and property owners

Different validators may apply different fee structures and discounts based on their business model.

Transaction Fees

When a property is sold on a marketplace, transaction fees may apply. These fees are:

• Determined by the platform where the sale occurs
• Typically a percentage of the sale price
• Split between the protocol and the validator

The Fabrica protocol includes a fee collection mechanism that distributes fees between:

• Protocol fee: Supports ongoing protocol development
• Validator fee: Compensates validators for their services

Lending Fees

When using a property token as collateral for lending, fees are determined by the lending protocol:

• NFTfi: Peer-to-peer lending fees set by individual lenders
• MetaStreet: Pool-based lending with protocol-determined rates

These fees are separate from Fabrica protocol fees and are paid directly to the lending platforms.

Transparency

Fees are always displayed before any transaction is confirmed. Users should review fee disclosures in the application interface when:

• On-ramping a property
• Listing a property for sale
• Accepting a loan offer

Building Fee-Enabled Applications

Developers building on the Fabrica protocol can integrate with the fee collection infrastructure. The FabricaFeeCollector contract handles:

• Collection of ERC-20 fees from obligors
• Distribution between protocol and validators
• Configurable fee splits

See the smart contracts documentation for technical details.