Understanding fee tiers is essential for liquidity providers and traders within the Turbos ecosystem. Turbos uses a tiered fee structure based on the correlation and stability of the token pairs. This guide provides an overview of the three fee tiers available in Turbos and the criteria for each.
Volatile Pairs: 1%
Volatile pairs are token combinations that are subject to significant price fluctuations. To compensate liquidity providers for the higher risks associated with these pairs, a fee rate of 1% is applied. This ensures that liquidity providers are fairly rewarded for offering liquidity to more unpredictable token pairs.
Most Pairs (Higher Correlation): 0.3%
Most pairs with a higher degree of correlation, such as some stablecoin combinations, will incur a 0.3% fee. These pairs generally exhibit less price volatility compared to the more volatile pairs, but they aren't entirely immune to price fluctuations. This fee tier offers a balanced rate for liquidity providers to ensure reasonable compensation for their provided liquidity.
Pegged Pairs (Stable): 0.05%
For token pairs that typically trade at a very tight range or are pegged to a specific value, a fee of 0.05% is applied. These pairs are generally the least volatile, with minimal price risks. Liquidity providers of these pairs can expect minimal fees due to the stability of these assets.