Economics

The fee

Every swap pays 2 basis points of its input (SWAP_FEE_PPM = 200).

All of it goes to the liquidity providers of the pool, by band, by fee weight. There is no protocol share, no treasury and no admin fee switch.

Who earns what

Fees are split across bands in proportion to how much each band trades. Interior bands earn on their full depth; a pinned band earns on its rim depth (Band.sigma), because it only trades the coins that have not fallen.

A narrow band near $1 needs far less capital for the same depth, so per dollar deposited it earns more while prices stay near $1. It stops earning on the falling coin once that coin passes its edge.

Why both sides show up

• Traders: one hop between any two dollars, with depth from every band at once, instead of routing through pairwise pools.
• Liquidity providers: they choose how close to $1 they stand. A narrow band is the most efficient place for stablecoin capital; a wide band earns from every swap and carries more depeg risk.

Choosing a band