đĒFees & Parameters
Overview
If you expect long bouts of inactivity in your pool, do not use Stable Pair as they require frequent updates.
See risks here: https://docs.cronfi.com/twamm/fundamentals/inactivity
V1: Fee Schedule
Max fees for both short-term and long-term fees are capped at 1%.
Pool Parameters
LP Benefits
Unlike traditional DEXs where there's a single fee and swap interface, TWAMMs have a dual swap interface. Therefore LPs get fees from both short-term (toxic) and long-term swaps (non-toxic).
Partner Fees
Balancer DAO
Balancer can charge a fee on pools, especially ones incentivized by veGauges, up to 50% of the swap fees. These fees are flexible and will be applied pool-by-pool depending on volume, fees, and other factors. See more here:
MEV: Dedicated Arbitrageurs
Certain partner arbitrageurs will get a lower short-term swap fee to incentivize frequent arbitrage. In return, the arbitrageurs will return some of the MEV extracted back to the protocol which will be donated back to the pool LPs pro rata. See more here:
Live Experiment
Getting the correct fee schedule and setting up the correct incentive structure to benefit all three parties (traders, arbs, LPs) is an extremely difficult problem. We have made our protocol extremely flexible to allow in-flight changes to these fees based on market conditions. There will be changes to the fee schedule to ensure all parties are optimally rewarded.
If you're a researcher or a protocol working on a solution to optimize such fees, please reach out. See the problem statement here:
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