Fees

Swapper Fees

Anytime a swap occurs, swappers pay fees corresponding to the bpsPerTick parameter. For example, if bpsPerTick is set to 25 BPS (0.25%), then swappers pay a fee that corresponds to 0.25% of the annualized rate.

Swappers pay the following fee to limit order users:

$$fee = swappedAmount * (e^{(bpsPerTick * time\ to\ maturity)} - 1)$$

Pool Fees

If a Curator sets limitFeeShare to 0%, all fees paid by swappers will be allocated entirely to limit order users. Since users swap at an exchange rate that is ± 1 tick from the current tick, the absence of pool fees allows the tick's liquidity providers (LPs) to always lend or borrow at a more favorable rate compared to the tick's interest rate. Fees automatically compound inside the ticks, meaning users do not need to claim them—they will programmatically accrue. If a Curator sets limitFeeShare greater than 0%, a portion of the fees paid by swappers will go to limit order users, while the remainder accrues to the PoolManager's reserves.

Pool fees are computed as follow:

$$poolFees = swappedAmountCurrencyIn - swappedAmountCurrencyIn / e^{(bpsPerTick * time\ to\ maturity * feeShare)}$$

Pool Fees are always accrued in the currencyIn. When swapping from Loan Token to Fixed Token fees are paid in Loan Token and when swapping from Fixed Tokens to Loan Tokens fees are paid in Fixed Tokens.

Fee Shares

Fees are set by the Curator during a pool's initialization. If limitFeeShare is set to 0% upon initialization, they will remain at 0% for the entire duration of the pool, even if parameters are updated while the pool is running. This means that fee shares are immutable for the lifetime of the pool.

Fee Claiming

Pool Reserves can only be claimed by Curators after maturity by the pool's fee recipient.