# Introduction

**Introducing “Zero-fee perps”, a new type of perpetual purpose-built for high leverage, loss averse traders.**

What if there was a perpetual you could truly hold on to, one that you only pay fees on if you win. A perp that aligns all counterparties: the protocol, protocol LPs and the traders. Here’s how it works:

<figure><img src="/files/560ifHMQ8B8UeQBqmV9X" alt=""><figcaption></figcaption></figure>

* Say bob wants to open a ETH long trade and chooses zero-fee perps.
* This would allow Bob to open a position size of $1M ($10K collateral, times 100x leverage) for free! This means:
  * No opening fees or fixed closing fees.
  * No borrow fees (”holding costs”).
* As the trade goes on, one of two things can happen
  1. Bob is right, and his gross PNL is positive. Say the price moves 1% in his favor, meaning on 100x leverage he is now up 2x on his collateral.&#x20;
     * *Bob will now pay a fraction of his profits as fees.*
  2. Bob is wrong, and his gross PNL is negative
     * Bob doesn’t pay any close fees, or borrow fees while closing the trade.

In option A, Bob made pure profits without putting up any fees upfront, and also earned Avantis XP. In option B, Bob only lost on gross PNL (market moves), however did not give up any portion of his collateral to fees, and also potentially earned some Avantis XP!

This is how zero-fee perps work! It allows you to hold onto a perp position for much longer than a traditional perp, and also focuses on fee sharing only after traders are profitable. **This closely aligns the protocol to LPs and traders.**


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