# Overview (Technical)

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### **At a high level, the Ostium protocol features:**

**Virtual Exposure.** The Ostium Protocol enables onchain price exposure to a suite of Real World Assets, beginning with forex, commodities, indices, and blue-chip crypto assets. Ostium is not a tokenization protocol minting off-chain backed equivalents of non-crypto assets (e.g., ERC-20 tokens representing treasury bonds) but rather an application enabling virtual price exposure, entirely onchain, to these assets. This system is facilitated by the exchange of stablecoins between traders and liquidity providers and the use of high-speed oracles for asset pricing.&#x20;

**Vault.** A single on-chain liquidity pool that backs all trades and collects fees. LPs deposit USDC to mint OLP and share pro-rata in results. OLP always earns **30% of opening fees** in real time. When the system is **undercollateralized (c-ratio < 100%)**, the vault also receives **100% of rollover fees** and **100% of liquidation rewards** and temporarily becomes the counterparty to **net trader PnL** at daily settlement. When the system is **overcollateralized (c-ratio ≥ 100%)**, the vault does **not** take trader PnL and only accrues opening fees.

**Oracle Pricing at Position Open.** Pricing at trader position opening is determined via [Ostium's RWA oracle infrastructure](https://ostium-labs.gitbook.io/ostium-docs/supporting-infrastructure/price-oracle) (operated by Stork Network) or [Chainlink low-latency oracle feeds](https://blog.chain.link/low-latency-oracle-solution/), depending on the asset (RWA vs. crypto). Both feed networks update on a roughly sub-second basis, reporting prices pulled via a combination of sources from the traditional markets for off-chain assets.&#x20;

**Automations: Liquidations, Stop and Limit Orders.** Asset price tracking required to determine when Liquidations, Stop and Limit orders should be executed, as well as the execution of these transactions themselves, are performed by either [Chainlink Automations](https://docs.chain.link/chainlink-automation/introduction) and [Gelato Functions](https://docs.gelato.network/developer-services/web3-functions), depending on the asset. In contrast to protocol-run automations, these services allow for more decentralized and reliable execution, as well as more predictable pricing for users.&#x20;

**Risk-Adjusted Fee Structure.** To capture and minimize the risk an open position poses to the Vault via directional exposure, traders are subject to variable fees that compound per block.&#x20;

* **Funding Fees** vary as a function of the skew or imbalance in OI for a particular asset, which exposes the SLL to counterparty risk. This fee increases non-linearly with imbalance to encourage arbitrageurs to take the more "unpopular" side of a trade.&#x20;
* **Rollover Fees** reflect the underlying market’s holding (carry) costs—primarily interest-rate differentials, convenience yield, and storage/borrow where applicable. It accrues predictably over time and passes real-world costs through to users.
* **Opening Fees for crypto pairs.** Crypto pairs use a flat opening fee — the maker fee is now equal to the taker fee. The previous differential model, which incentivized OI-balancing trades with a reduced maker fee, has been removed.