What Is Fee Splitting?

How Fee Splitting Works

When a trade occurs on a whitelabel or operator-deployed exchange, the trading fee is collected and divided according to predefined rules:

• Base venue fee – The execution venue (e.g., Hyperliquid) collects its standard trading fee from the trade.
• Builder/operator share – A portion of the fee (or an additional markup) is attributed to the operator whose front-end routed the order. This is typically tracked through builder codes, referral codes, or API keys.
• Infrastructure provider share – If an infrastructure provider (like perps.studio) is involved, they may receive a share of the operator's portion for providing the platform technology.

The exact split ratios vary by venue, operator agreement, and volume tier. Common structures include:

• Percentage split – E.g., 60% to venue, 40% to operator.
• Markup model – The operator adds basis points on top of the venue's base fee. The venue keeps its fee; the operator keeps the markup.
• Tiered splits – The operator's share increases as they route more volume, incentivizing growth.

Fee Splitting on Hyperliquid (HIP-3)

Hyperliquid's HIP-3 builder code system is one of the most well-defined fee-splitting implementations in decentralized derivatives:

• Builder codes – Each operator registers a builder code on-chain. Orders submitted with a builder code are attributed to that operator.
• Fee attribution – When an attributed order generates trading fees, a defined portion is routed to the builder's address.
• Transparent and automatic – Fee splitting happens on-chain, meaning builders can verify their earnings in real time without relying on off-chain reporting.
• No minimum volume – Unlike traditional exchange referral programs that may require minimum volume thresholds, builder codes earn from the first trade.

This transparent, on-chain fee-splitting mechanism is a significant advantage of decentralized venues over centralized exchanges, where fee sharing is typically managed through opaque, off-chain agreements.

Fee Splitting Structures

Different fee-splitting models serve different business relationships:

The choice of model affects both the operator's revenue predictability and their incentive to grow volume. Revenue share models are simplest to administer; markup retention models give operators maximum pricing flexibility.

Economics of Fee Splitting

To understand whether fee splitting creates a viable business, consider the math:

• Assume a venue charges 3.5 basis points (0.035%) on taker orders.
• If the operator earns 40% of fees, they receive 1.4 basis points per dollar of taker volume.
• On $10M monthly taker volume, the operator earns $1,400.
• On $100M monthly taker volume, the operator earns $14,000.
• On $1B monthly taker volume, the operator earns $140,000.

These numbers scale significantly when the operator also adds a fee markup. If the operator charges 5 basis points total (adding 1.5bp to the venue's 3.5bp), they earn the 1.4bp share from the venue fee PLUS the full 1.5bp markup, more than doubling their revenue per dollar of volume.

Volume is the key variable. Fee splitting only becomes a substantial revenue stream at meaningful trading volumes, which is why distribution capability is the operator's most valuable asset.

Fee Splitting and Incentive Alignment

Well-designed fee splitting aligns incentives across the entire value chain:

• Venue incentive – The venue wants more volume, which deepens liquidity, attracts more users, and grows the total fee pool. Sharing fees with operators is a customer acquisition cost that is more efficient than direct marketing.
• Operator incentive – The operator earns more by driving more volume. This incentivizes investment in user acquisition, UX improvement, and community building.
• User benefit – More operators mean more entry points to the market. More volume means better liquidity, tighter spreads, and lower slippage for everyone.

When fee splitting is poorly designed—for example, if the operator's share is too small to justify investment in growth—the flywheel stalls. The most successful models give operators enough revenue to fund meaningful marketing and development efforts.

Fee Splitting for perps.studio Operators

perps.studio's model is built around fee splitting as the primary revenue mechanism for operators:

• Transparent fee configuration – Operators set their own fee schedules, choosing how much to charge above the venue's base rate.
• On-chain attribution – All volume routed through the operator's deployment is tracked via builder codes, ensuring accurate and verifiable fee attribution.
• Multiple revenue streams – Operators earn from the venue's fee share (builder code revenue) plus any markup they add, creating compounding revenue potential.
• No minimum volume – Operators start earning from their first user's first trade, with no volume thresholds to meet before revenue begins.

This model enables teams with existing audiences—whether trading communities, media brands, or fintech apps—to monetize their distribution immediately through perpetual futures trading fees.