Vigorish (Vig)

What is Vig?

Vigorish (vig) is a small fee embedded in every trade. It generates revenue for:

• 50% — Platform (operational costs)
• 50% — Yield seekers (dominant side holders, distributed pro-rata by shares)

Dynamic vig rate

FatTail uses probability-based dynamic vig rather than a flat rate:

effectiveRate = baseRate(3%) × min(price, 1 - price) × 2

Examples

Market skew	Effective vig rate
90/10	0.6%
95/5	0.3%
50/50	3.0%

Markets with more extreme skew have lower vig, making tail betting more accessible.

Vig distribution

After each trade:

1. Vig is calculated based on the trade cost and current price
2. 50% goes to the platform treasury
3. 50% is distributed to dominant-side holders, pro-rata by share count

Distribution is non-blocking — it happens asynchronously after the trade response.

Auto-compound

Yield seekers can enable auto-compound on their positions. When enabled, vig distributions are automatically reinvested into additional shares, compounding returns over time.