Protocol Fees

Fees associated with the DEX

Overview

The protocol fees collected by Mondrian Swap ensure the sustainability, growth, and long-term success of the decentralized exchange. These fees contribute to liquidity incentives, staking rewards, and protocol development, reinforcing Mondrian Swap’s position as a capital-efficient and community-driven DEX.

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Sources of Protocol Fees

1. Trade Fees

The primary revenue source for Mondrian Swap comes from trading fees paid by users when executing swaps. These fees are distributed to Liquidity Providers (LPs) in the input token, compensating them for providing liquidity and ensuring smooth trade execution.

2. Protocol Fees

A portion of the trading fees collected, currently 50%, is allocated to protocol sustainability and ecosystem growth. This structured fee distribution model aligns incentives between liquidity providers, stakers, and developers, as described below:

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Protocol Fee Distribution

Mondrian Swap’s fee structure ensures a balanced allocation of protocol earnings:

📌 60% → Reinvested into Liquidity Provision ✔ Used to boost liquidity depth on Mondrian Swap. ✔ Enhances capital efficiency and trading experience. ✔ Supports higher yields for LPs, attracting more liquidity.

📌 30% → Distributed to veMondrian Stakers (Upon Release) ✔ Rewards long-term Mondrian Swap governance participants. ✔ Encourages active protocol engagement through staking incentives. ✔ Until veMondrian is launched, these funds will be stored for future distribution.

📌 10% → Protocol Development ✔ Funds ongoing development, ensuring continuous innovation. ✔ Supports research, audits, and ecosystem growth initiatives. ✔ Helps build new features, integrations, and security improvements.

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Community Governance & Fee Adjustments

Mondrian Swap is committed to decentralized governance, meaning that in the future:

• Protocol fees and their distribution will be decided by governance proposals.

• veMondrian stakers will have voting rights to adjust fee structures based on community consensus.

• The system ensures transparent fund allocation, driven by user engagement and network growth.