Fees

MONDA’s Fee System: Built for Efficiency and Flexibility

MONDA’s concentrated liquidity model ensures that swap fees are distributed fairly and efficiently, benefiting liquidity providers (LPs) and traders alike. Unlike traditional AMMs, MONDA’s fee structure is designed to maximize capital efficiency and reward active liquidity while keeping transactions smooth and cost-effective.

Swap Fees: Rewarding Active Liquidity

Whenever a swap occurs on MONDA, fees are distributed exclusively to liquidity providers (LPs) with active positions in the relevant price range.

🔹 Only in-range liquidity earns fees – If a position’s price range no longer includes the current market price, it stops accumulating fees until the price re-enters the range.

🔹 Fees are separate from liquidity – Unlike standard AMMs that automatically reinvest swap fees into the pool, MONDA accumulates swap fees separately, allowing LPs to claim earnings at any time without withdrawing liquidity.

This system ensures that liquidity is deployed where it’s most useful, rewarding LPs who provide liquidity at key price levels rather than spreading capital inefficiently.

Fee Tiers: Customizable Costs for Every Market

To provide greater flexibility for different asset types and trading strategies, MONDA supports multiple fee tiers for the same token pair. Currently, the protocol offers six different tiers:

📌 0.01% – Designed for low-volatility assets like stablecoin pairs, ensuring minimal slippage.

📌 0.05% – Optimal for blue-chip assets with high liquidity.

📌 0.1% – Balances cost and incentives for actively traded tokens.

📌 0.25% – Ideal for medium-volatility tokens that require deeper liquidity.

📌 1% – Encourages liquidity for high-risk, high-reward assets.

📌 2% – For new tokens. Supports illiquid or experimental assets, rewarding LPs for taking on more risk.

Each trading pair will naturally gravitate toward an ideal fee tier based on its volatility, trading volume, and demand.

🔹 Stablecoin pools tend to favor lower fees to ensure trades execute as close to 1:1 as possible.

🔹 High-volatility tokens require higher fee pools to compensate LPs for the risk of holding them.

This market-driven approach allows liquidity providers and traders to determine the most efficient fee structure organically, ensuring optimal liquidity distribution across all trading pairs.

Protocol Fees: Sustainable Growth for MONDA

To ensure long-term development and sustainability, MONDA collects a small percentage of swap fees as a protocol fee—defaulted at 20% per transaction.

🔹 Supports ongoing innovation – Funds from protocol fees contribute to ecosystem growth, development, and incentives.

🔹 Strengthens MONDA’s economic model – Helps maintain a healthy liquidity network while rewarding long-term contributors.

By aligning incentives between traders, LPs, and the protocol, MONDA is building a robust and sustainable liquidity ecosystem within Monad. 🚀