Fee Structure

Total Fee

The total fee for a swap is the sum of the base fee and variable fee:

Where:

$$f_s=f_b+f_v$$

• fs = Total swap fee of a DLMM trade

• fb = Base fee (fixed component)

• fv = Variable fee (dynamic, based on market volatility and bins crossed)

Base Fee

The base fee is configured by the pool creator:

$$fb=m×B×s$$

Where:

• B = Base factor (a scaling factor chosen and set by the pool creator)

• s = Bin step (price interval between bins, determined by the pool creator)

• m = 10, a constant parameter introduced for decimal compatibility with a fixed value of 10

The base fee provides a predictable, fixed cost for each trade.

Variable Fee

The variable fee adjusts dynamically according to market volatility:

$$fv​(n)=C⋅(v_a​(n)⋅s)^2$$

Where:

• C = Control parameter for scaling the variable fee

• v_a (n) = Volatility accumulator for bin n

• s = Bin step

• n = Bin ID (unique identifier for the bin)

The variable fee ensures that:

• Trades crossing multiple bins pay proportionally higher fees

• Market volatility is accounted for, helping stabilize liquidity pools

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Composition Fee

In Cetus DLMM, a Composition Fee may be applied during the liquidity provision when the ratio of tokens deposited into a bin differs from the bin’s current token ratio. This fee is charged only on the imbalanced portion of the deposit and follows the same rate as the pool’s total swap fee. The mechanism ensures that liquidity remains efficiently balanced within each bin, encouraging deposits that match the active bin’s composition and maintaining pool stability.

Protocol Fee

A certain percentage of the Total Fee of each DLMM trade is reserved as the DLMM Protocol Fee. Its initial default value is set to 20%. The remaining portion goes to DLMM LPs.