Fees

Every transaction includes a fee, here's a brief explanation on how they work.

Swap Fees

When you swap (trade) on our exchange, you will pay a trading fee, based on which pool fee you are using.

Conversely, when you provide liquidity, you will earn that fee.

Pool Fees Tiers

SpookySwap V3 has introduced multiple pools for each token pair, each with a different swapping fee. Liquidity providers can create pools at four fee levels: 0.01%,0.05%, 0.30%, and 1%. More fee levels may be added in the future.

Although distinct fee tiers may lead to some degree of liquidity fragmentation, we believe that most pairs will calibrate to an obvious fee tier, which then serves as the canonical market. We expect like-kind asset pairs to congregate around the 0.05% fee tier and pairs like ETH/DAI to use 0.30%, while exotic assets might find 1.00% swap fees more appropriate.

Choosing The Right Pool Fee

We expect certain types of assets will naturally align with specific fee tiers, reflecting the incentives for both swappers and liquidity providers.

Low-volatility assets, such as stablecoins, are likely to cluster in the lowest fee tier. This is because the price risk for liquidity providers holding these assets is minimal, while those swapping are motivated to achieve an execution price as close to a 1:1 ratio as possible.

Conversely, we anticipate that more exotic or infrequently traded assets will gravitate towards higher fee tiers. This is due to liquidity providers seeking to offset the cost risks associated with holding these assets for an extended period.

Protocol Fees

SpookySwap has a protocol fee that can be turned on. Compared to V2, SpookySwap V3 has more freedom in deciding the fraction of swap fees that go to the protocol.