Saros DLMM uses a dynamic fee model that includes:
Base Fee – A fixed fee applied to every swap.
Variable Fee – A dynamic fee that adjusts based on market conditions.
Protocol Fee – A portion of the total trading fees generated that supports the long-term development and stability of the protocol.
The Base Fee is the minimum fee charged for each swap on Saros DLMM liquidity pools.
It’s predefined and usually consistent across most trading pairs.
It ensures a consistent return for liquidity providers.
The Variable Fee is a flexible fee component that adjusts based on:
Market volatility
Imbalance in liquidity
The risk level of the pool
It’s designed to protect LPs by discouraging harmful arbitrage during periods of rapid price movement.
Together, Base Fee + Variable Fee = Total Trading Fee per swap.
The Protocol Fee is a defined share of the total trading fee set aside to support the ecosystem’s sustainability, infrastructure, and operations.
The standard configuration allocates 20% of the total trading fee to this purpose.
The remaining 80% is distributed to liquidity providers who supply assets to the pool.
Example: If a pair on Saros DLMM has $1M in trading volume and generates $10,000 in total fees (from base + variable):
$8,000 (80%) goes to liquidity providers
$2,000 (20%) goes to Saros protocol
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