Fees structure
Orbit Finance has a transparent and intentional fee design that rewards liquidity providers, funds ongoing protocol development and aligns incentives between projects and traders. Fees are structured differently depending on the type of pool and the activity happening inside it. This page explains exactly how fees work for permissionless markets, permissioned markets, liquidity providers and traders.
Protocol fee overview
There are two main categories of pools on Orbit Finance:
Permissionless Pools - These are open to any trader or liquidity provider with no identity requirements.
Permissioned Pools - These are restricted by issuer rules, often used for tokenised assets, real-world products, or compliance-aware markets.
The base protocol fee differs depending on which category you are in. This is the fee that the protocol earns on trades, separate from what liquidity providers receive.
In permissionless pools, Orbit Finance charges a 18% protocol fee on the base fee.
In permissioned pools, Orbit Finance charges a 12.5% protocol fee on the base fee.
This difference reflects the additional operational and compliance support required for permissioned markets.
Example
For a $10,000 trade in a permissionless pool with a 2% base fee, the total fee is $200.
Orbit Finance takes 18% of that, which is $36. The remainder goes to liquidity providers and any other defined incentive flows.
In a permissioned pool with the same $10,000 trade and a 2% base fee, the protocol takes 12.5% of $200, which is $25.
How the fee structure actually works
Fees on Orbit Finance are not a single static number. They are built from multiple components:
1. Base Fee
This is the foundation of the fee that traders pay for each swap. The base fee is defined when the pool is created and is usually expressed as a percentage of trade value (for example, 2%). The base fee is where both traders and liquidity providers first feel the cost and benefit of trading activity. It exists to compensate the LPs for offering liquidity and is the pool’s fundamental revenue source.
2. Protocol Fee
From the base fee, a percentage goes to the protocol. This is what sustains Orbit Finance operations, development, and governance. Protocol fees are taken on every trade regardless of pool type, but at different rates:
18% in permissionless pools
12.5% in permissioned pools
This fee is taken automatically and transparently on-chain.
3. Dynamic Fee Adjustments
On top of the base fee, Orbit Finance uses a Dynamic Fee Model that increases the effective fee when markets are volatile or when liquidity is thin. This adjustment is temporary and reflects real market conditions so that liquidity providers are compensated appropriately when risk is higher.
Dynamic fees are measured on-chain and adjust automatically. Traders do not face arbitrary surcharges that are unrelated to actual market dynamics.
How Fees Flow to Liquidity Providers
After the protocol fee is taken from the base fee, the remaining portion is distributed to liquidity providers.
In simple terms:
A trade occurs
The base fee is collected
The protocol takes its share (12.5% or 18%)
The rest goes to liquidity providers
Liquidity providers earn fees when trades actually use their liquidity — that is, when price moves into the bins they have supplied. If liquidity is outside the active range, it does not earn fees during that period.
Example:
A trader executes a $100,000 swap with a 2% base fee. That is $2,000 in fees.
Suppose this is a permissioned pool: protocol takes 12.5% of $2,000 = $250.
That leaves $1,750 in fees to be distributed to liquidity providers based on how often their bins were used during the trade.
Fee examples
Example 1 - Permissionless Pool
Trade value: $50,000
Base fee: 2% -> $1,000 total fee
Protocol fee: 18% of $1,000 -> $180 to protocol
LP revenue: $820 shared among liquidity providers
If dynamic conditions kick in and fees rise to 2.5%, the total fee becomes $1,250. Protocol takes 18% of that ($225), and LPs share $1,025.
Example 2 - Permissioned Pool
Trade value: $200,000
Base fee: 2% -> $4,000
Protocol fee: 12.5% of $4,000 -> $500 to protocol
LP revenue: $3,500 shared among liquidity providers
With dynamic adjustment to 2.2% due to volatility, total fee is $4,400.
Protocol still takes 12.5% -> $550 to protocol, $3,850 to LPs.
How traders experience fees
For traders, fees are always shown upfront before confirming a swap. Orbit Finance displays:
The base fee
The protocol fee portion
The effective fee including dynamic adjustments
Because fees adapt to market conditions, the exact same swap size may have a slightly different fee at different times, but the logic is always transparent. Traders can see why the fee changed: either because the pool base fee was updated or because volatility adapted the effective rate.
Liquidity provider perspective
Liquidity providers are interested in:
How often their liquidity is used
What fees they earn relative to capital deployed
How dynamic conditions affect earnings
Providers can see fee accruals in real time on the pool page. As price moves through bins that they have supplied, fee revenue is added to their position. Providers can also see how much of their liquidity is currently active and earning versus inactive and waiting for price return. This helps them make informed decisions on rebalancing or redeploying liquidity.
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