Dynamic Fees
Once a token graduates, its swap fee isn't fixed. It sits at 0.30% when the market is calm and steps up to 1.20% when the price is moving hard, then settles back down. The reason is simple: providing liquidity costs more when a token is volatile, so the fee rises to match.
What providing liquidity actually costs
A pool doesn't have an opinion about price. It quotes from a formula, and when the outside market moves, the pool's price is briefly stale — so someone trades against it and pockets the difference. That trade is what pulls the pool back in line, and the value it captures comes out of the liquidity.
The result is familiar to anyone who has provided liquidity: you end up holding more of whatever fell and less of whatever rose, and you'd have been better off just holding both. It's usually called impermanent loss, and the size of it depends on one thing above all — how much the price moved. A quiet day costs almost nothing. A violent one costs a lot.
So the real cost of backing a pool isn't constant. It rises and falls with volatility.
Why a flat fee gets it wrong twice
Most pools charge the same fee whatever is happening, which means the number is wrong nearly all the time:
- In a calm market it's too high. Nothing much is being lost to price moves, so the fee is just friction — it makes the token more expensive to trade than it needs to be, and pushes volume away.
- In a volatile market it's too low. This is exactly when liquidity is expensive to provide, and a flat fee doesn't come close to covering it. The difference is value that leaves the pool.
Picking one number means picking which of those two mistakes to make.
What Frontier does instead
Every graduated Frontier token watches how much its own price has been moving and prices its swaps accordingly:
| Market conditions | Fee |
|---|---|
| Calm - price drifting normally | 0.30% |
| Active - price moving fast | 0.50% |
| Volatile - price swinging hard | 1.20% |
The measurement decays over roughly 10 minutes: a burst of movement raises the fee almost immediately, and the fee steps back down as things settle. Nobody flips a switch — it's automatic, per token, per swap.
The effect is that the fee is highest exactly when the liquidity behind the token is doing the hardest work, and lowest when trading should be cheap. Instead of one number that's wrong in both directions, the pool charges something close to what the moment is actually worth.
Volume is the point
Here's what makes this more than an accounting detail: on Frontier, the fees a token generates don't disappear into a protocol treasury. Every swap splits four ways.
- 70% goes to the liquidity itself. For a Frontier token that's mostly the position locked at graduation — and what that position earns flows on to the creator and the protocol.
- 30% is paid out on the spot, split between the protocol, the token's Staking Vault and the creator, in the proportion the creator set at launch.
Add those up and a token that trades heavily is paying its creator, its stakers and its liquidity continuously — and the dynamic fee means the busiest, most volatile stretches pay the most, rather than being the moments where the pool gives value away. Interest in a token turns into income for everyone attached to it. The full breakdown is on Fees & Revenue.
What the team can and can't touch
The protocol team can tune the fee tiers and thresholds, but only within hard limits written into the contract: no fee can ever exceed 10%, and these controls sit behind a multisig. What the team cannot do: touch the locked liquidity, redirect a token's staking vault, or change the fee share a creator picked at launch. Those are set once and permanent.