LPs currently receive 85% of trading fees. 15% is retained as a protocol fee.
We later plan to set a target liquidity for each pool and dynamically adjusts the share of trading fees allocated to LPs.
An LPs' share of fees for a given pool will range from 0% to 100% and be calculated using the following equation:
- P = Protocol-owned liquidity
- L = LP deposits
- T = Target liquidity
- i = Incentivization factor
The target liquidity and incentivization factor will be set manually by the team with an aim to optimize profitability within the current market conditions.
All trading fees that do not go to LPs are retained as a protocol fee.