Entry Fees vs Profit Fees on PredMart Explained
PredMart charges two distinct fees on leveraged positions: an entry fee (up to ~7%) deducted from your deposit when you open a position, and a profit fee (10% of gains) charged only when you close in profit. The entry fee is risk-based and varies by contract price and volatility, while the profit fee applies uniformly to winning trades. Understanding when each fee applies - and how they interact - helps you accurately calculate expected returns before entering any leveraged prediction market position.
What Is the Entry Fee and Why Does It Exist?
The entry fee is a risk-based charge taken from your deposit at position entry. Unlike flat trading fees on centralized exchanges, this fee scales with the risk profile of your trade - cheaper contracts and more volatile markets carry higher entry fees, sometimes reaching 7% of your deposit.
Why risk-based? Lenders providing USDC to the pool face asymmetric exposure. If your leveraged position gets liquidated, lenders absorb potential shortfall risk. The entry fee compensates them for this risk upfront and accrues directly to the lending pool.
Entry fee characteristics:
| Factor | Effect on Fee |
|---|---|
| Contract price near 50 cents | Lower fee |
| Contract price near 5 or 95 cents | Higher fee |
| Thin order book depth | Higher fee |
| High leverage used | Higher effective impact |
A position on a 10-cent contract carries more directional risk than one at 50 cents - prices can move proportionally faster. The entry fee reflects this reality.
What Is the Profit Fee and When Does It Apply?
The profit fee is straightforward: 10% of your realized profit, charged only when you close a position in the green. If your trade loses money or breaks even, you pay zero profit fee.
This creates alignment between the platform and traders. PredMart only earns the profit fee when you succeed. Compare this to platforms charging fees on every trade regardless of outcome - you pay whether you win or lose.
Key profit fee rules:
- Applies to net profit after your initial deposit is recovered
- Calculated at position close, not during the trade
- Does not apply to liquidated positions (no profit exists)
- Charged in USDC from your withdrawal
If you deposit $1,000, open a 3x leveraged position, and close with $1,400 total value, your profit is $400. The profit fee would be $40 (10% of $400), leaving you with $1,360.
How Do Entry Fees and Profit Fees Work Together?
These fees operate at different points in your trade lifecycle and serve different purposes. The entry fee is a cost of admission - you pay it regardless of outcome. The profit fee only matters if you win.
Worked example with both fees:
You deposit $1,000 to open a 4x leveraged long position on a contract priced at 40 cents.
- Entry fee (assume 4%): $40 deducted, leaving $960 effective deposit
- Borrowed amount: $2,880 (4x leverage on $960 minus the fee impact)
- Position value: ~$3,840 in shares
- Contract rises to 55 cents - your shares are now worth ~$5,280
- Close position: Repay ~$2,880 loan plus accrued interest (~$20)
- Gross return: $5,280 - $2,900 = $2,380
- Profit: $2,380 - $960 = $1,420
- Profit fee (10%): $142
- Net return: $2,380 - $142 = $2,238
Your effective return on $1,000 deposited: 123.8% after all fees. Without the position going your way, you would have paid only the $40 entry fee.
For detailed return calculations across different scenarios, see our guide on how much you can make leverage trading Polymarket.
Which Fee Matters More for Your Returns?
The answer depends on your win rate and average profit size. For frequent traders with modest wins, entry fees dominate. For traders making fewer, larger winning bets, the profit fee takes a bigger bite.
Fee impact comparison:
| Scenario | Entry Fee Impact | Profit Fee Impact | Dominant Fee |
|---|---|---|---|
| Small win (10% profit) | 4% of deposit | 1% of deposit | Entry fee |
| Medium win (50% profit) | 4% of deposit | 5% of deposit | Roughly equal |
| Large win (200% profit) | 4% of deposit | 20% of deposit | Profit fee |
| Loss or liquidation | 4% of deposit | 0% | Entry fee only |
The crossover point sits around 40-50% profit on your deposit. Below that, entry fees hurt more. Above that, the profit fee becomes your larger cost.
Strategic insight: If you are targeting small, frequent wins, keep entry fees low by trading contracts closer to 50 cents with decent liquidity. If you are swinging for larger moves on volatile contracts, accept the higher entry fee but know the profit fee will be substantial on success.
How Does PredMart Compare to Trading Without Leverage?
Trading the same contracts on Polymarket directly means zero entry fee and zero profit fee - but also zero leverage. The fee structure exists specifically because leverage amplifies both gains and risks.
Consider a $1,000 position on a contract moving from 40 to 55 cents:
Without leverage (Polymarket direct): - Buy 2,500 shares at 40 cents = $1,000 - Sell at 55 cents = $1,375 - Profit: $375 (37.5% return) - Fees: Polymarket taker fees only (~1-2%)
With 4x leverage (PredMart): - Control ~9,600 shares with $1,000 deposit - Same price move yields ~$1,420 profit before fees - After entry fee + profit fee: ~$1,238 net profit - Return: 123.8% vs 37.5%
Even after PredMart's fees, the leveraged return is 3.3x higher than unleveraged. The fees are the cost of capital efficiency. You can read more about the mechanics in our leveraged trading documentation.
How to Calculate Your Break-Even Point Including Fees
Knowing your true break-even helps set realistic profit targets. You need the contract to move enough to cover:
- The entry fee (already deducted)
- Accrued interest on borrowed funds
- Enough profit that after the 10% profit fee, you are whole
Break-even formula (simplified):
Required price move % > (Entry Fee % + Interest %) / (Leverage - 1) / 0.9
For a 4x position with 4% entry fee and 1% interest over holding period:
Required move > (4% + 1%) / 3 / 0.9 = 1.85%
The contract needs to move roughly 1.85% in your favor just to break even after all fees. At 5x leverage, this threshold drops slightly because gains are amplified more.
Practical minimums by leverage:
| Leverage | Approx. Break-Even Move |
|---|---|
| 2x | 5-6% |
| 3x | 2.5-3% |
| 4x | 1.8-2.2% |
| 5x | 1.5-1.8% |
These assume moderate entry fees. Trades on thin or extreme-priced contracts require larger moves.
FAQ
Do I pay both fees on every trade? No. The entry fee is always charged when opening a position. The profit fee only applies if you close in profit. Losing trades and liquidations incur no profit fee - though liquidation has its own 5% liquidator fee taken from remaining collateral.
Can I avoid the entry fee by using lower leverage? The entry fee percentage is based on contract risk, not leverage level. However, lower leverage means a smaller borrowed amount relative to your deposit, so the fee's impact on your total capital is proportionally the same. You cannot game the fee by adjusting leverage.
Is interest a third fee I should worry about? Interest is separate from entry and profit fees. It accrues on your borrowed USDC at a variable rate based on pool utilization. For short-term trades (hours to days), interest is typically minor. For positions held weeks or longer, factor it into your calculations.
Why does PredMart charge an entry fee when other platforms do not? Most leveraged trading platforms charge funding rates or liquidation penalties instead. PredMart's entry fee compensates lenders upfront for bearing liquidation risk. This model means no ongoing funding rate bleeding your position - you know your entry cost immediately.
What happens to fees if I get liquidated? You already paid the entry fee at entry - that is gone. No profit fee applies since there is no profit. Liquidation itself costs 5% of remaining collateral to the liquidator. Your total loss is your deposit minus whatever collateral remains after loan repayment and liquidator fee.
Trade with up to 5x leverage on PredMart: https://predmart.com