Progressive Fee Structure

Fee Formula

The v5-ASAMM protocol implements a quadratic progressive fee that scales with trade size relative to pool liquidity:

fee(x) = baseFee + impactFee * (x / L)^2

Parameters

Parameter	Description	Default
baseFee	Minimum fee charged on every trade (bps)	30 (0.30%)
impactFee (maxImpactFee)	Maximum additional fee for large trades (bps)	100 (1.00%)
x	Absolute trade size in token units	--
L	Total pool liquidity	--

Fee Schedule

Trade Size (% of pool)	Base Fee	Impact Fee	Total Fee
0.01%	0.30%	~0.000001%	~0.30%
0.1%	0.30%	~0.0001%	~0.30%
1%	0.30%	~0.01%	~0.31%
5%	0.30%	~0.25%	~0.55%
10%	0.30%	~1.00%	~1.30%
25%	0.30%	~6.25%	~6.55%
50%	0.30%	~25.00%	~25.30%

Fee Distribution

Collected fees are split three ways:

Recipient	Share	Purpose
LP providers	70% (7000 bps)	Distributed proportional to liquidity, weighted by loyalty multiplier
Protocol treasury	20% (2000 bps)	Governance-controlled, funds development and insurance
Trader reward pool	10% (1000 bps)	Epoch-based rebates for consistent small traders

Fee Distribution in Code

The fee split is defined in FeeConfig:

struct FeeConfig {
    uint256 baseFee;          // Base fee in basis points
    uint256 maxImpactFee;     // Maximum impact fee in basis points
    uint256 lpShareBps;       // LP share (default: 7000 = 70%)
    uint256 protocolShareBps; // Protocol share (default: 2000 = 20%)
    uint256 traderShareBps;   // Trader rebate pool (default: 1000 = 10%)
}

LP Loyalty Multiplier

Long-term LPs earn enhanced fee shares via a combined time and volume multiplier:

multiplier = time_factor * sqrt(volume_factor)

Time Factor

Duration Staked	Factor
0 - 30 days	1.00x
30 - 90 days	1.25x
90 - 180 days	1.50x
180+ days	2.00x

Volume Factor

volume_factor = min(lp_liquidity / average_lp_liquidity, 3.0)

Capped at 3x to prevent plutocratic dominance.

Multiplier Examples

LP Duration	Relative Size	Multiplier
10 days	1x average	1.00 * 1.00 = 1.00x
60 days	1x average	1.25 * 1.00 = 1.25x
120 days	2x average	1.50 * 1.41 = 2.12x
200 days	3x average	2.00 * 1.73 = 3.46x

Trader Rebates

Epoch System

• Epoch duration: 7 days (configurable)
• Qualification: Minimum N swaps per epoch (default: 5), each below whale threshold
• Rebate pool: 10% of all fees collected during the epoch
• Distribution: Proportional to qualifying trade volume

Rebate Qualification

Trades qualify for rebates if:

1. Trade size is below maxTradeSizeBps of pool liquidity (default: 5%)
2. Trader has made at least minSwapsForRebate qualifying trades in the epoch

Rebate Calculation

trader_rebate = (trader_qualifying_volume / total_qualifying_volume) * rebate_pool

Anti-MEV Properties

The progressive fee structure provides natural MEV resistance:

1. Sandwich attacks: The attacker's front-run trade faces quadratic fees, making the attack unprofitable for most sizes
2. JIT liquidity: Loyalty multipliers reward long-term LPs over just-in-time providers
3. Flash loan manipulation: Large instant trades face both sigmoid price impact AND quadratic fees

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## License

Licensed under the **GNU General Public License v3.0**--see [LICENSE](../../LICENSE) for terms.

Copyright (C) 2026 PaxLabs Inc. SPDX-License-Identifier: GPL-3.0-only

## Contact & Resources

| Resource | Link |
|----------|------|
| **Protocol Documentation** | [docs.hyperpaxeer.com](https://docs.hyperpaxeer.com) |
| **Block Explorer** | [paxscan.paxeer.app](https://paxscan.paxeer.app) |
| **Sidiora Exchange** | [app.hyperpaxeer.com](https://sidiora.hyperpaxeer.com) |
| **Website** | [paxeer.app](https://paxeer.app) |
| **Twitter/X** | [@paxeer_app](https://x.com/paxeer_app) |
| **General Inquiries** | [infopaxeer@paxeer.app](mailto:infopaxeer@paxeer.app) |
| **Security Reports** | [security@paxeer.app](mailto:security@paxeer.app) |