# Fee Model **A One-Time Fee of 0.5%** Most borrowing platforms use a fluctuating APR determined by supply and demand, making it tedious for users who must regularly monitor their positions to prevent liquidation. Lyve solves this by offering interest-free loans with a modest one-time fee of 0.5% for long-term borrowings exceeding six months. **Short-Term Borrower Incentives** For those who repay their debt within six months, Lyve provides a pro-rata refund of the initial 0.5% fee. This mechanism is managed by a smart contract that calculates the refund based on the time elapsed, ensuring at least a week's worth of interest is accounted for. **The Benefits of Using LSTs as Collateral** While your LST is acting as collateral, it continues to grow in value against ETH, generally between a 3% and 8% APR. This dual-income stream lowers your risk of liquidation or redemption as time passes, assuming stable or growing ETH prices. **Liquidation Fees and Redemption Mechanism** To mitigate LYU's volatility, Lyve will implement a Liquity-like redemption mechanism post-launch. --- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter: ``` GET https://lyve-finance.gitbook.io/lyve-finance/product/fee-model.md?ask= ``` The question should be specific, self-contained, and written in natural language. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.