Dynamic fee model

Orbit Finance doesn’t use a fixed fee that stays the same no matter what the market is doing. Instead, it uses a dynamic fee model that responds to real market conditions so liquidity providers are rewarded fairly and traders experience smoother execution.

At its heart, the dynamic fee model adjusts fees based on how active and volatile the market is. When prices are calm and trades are happening predictably, fees stay lower so traders don’t pay more than they should. When markets become more volatile or activity spikes, fees gradually increase. This higher fee compensates liquidity providers for the added risk they take on during busy periods, and it also helps calm excessive short-term speculation that could destabilise the pool.

You can think of it like surge pricing in ride-sharing. On a quiet afternoon a ride is cheaper because drivers don’t have to work as hard to find fares, but during rush hour when demand and uncertainty are higher prices go up. In Orbit Finance, when trading demand rises or price swings become larger, the fee adjusts upward to reflect the environment. This means liquidity providers earn more when they’re providing value in challenging conditions and traders get fair pricing when markets are calm.

What makes this model especially powerful is that it happens automatically and transparently on-chain. Traders and liquidity providers don’t need to guess what the fee might be, the system calculates it based on clear rules tied to market behaviour. That transparency means better predictability for everyone involved. Traders know that fees stay reasonable in stable conditions, and liquidity providers know they are compensated for weathering volatility. Over time, this leads to deeper, more resilient markets where capital isn’t easily driven away by short-term noise.