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V2 Fees

All V2 pools charge a fixed 0.3% fee on every swap. This fee is not configurable per pool.

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How Fees Work

The fee is applied to the input token before the swap calculation:
  1. Trader sends amountIn of token A
  2. The effective input is amountIn × 0.997 (0.3% deducted)
  3. The output amount is calculated using the reduced input
  4. The fee portion remains in the pool, increasing k
Input: 1000 tokens
Fee:   1000 × 0.003 = 3 tokens
Effective input: 997 tokens → used for swap calculation

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Fee Accumulation

Fees are not distributed separately — they accumulate directly in the pool reserves. This means:
  • k grows over time as fees are collected
  • LP token value increases proportionally
  • LPs claim their fees when they withdraw liquidity (burn LP tokens)

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Example

A pool with 100,000 A / 100,000 B reserves:
DaySwap VolumeFees CollectedNew k
110,000 A30 ASlightly higher
250,000 B150 BHigher still
Over time, the pool reserves grow from accumulated fees, benefiting all LP token holders proportionally to their share.

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Comparison with V3

V2V3
Fee rateFixed 0.3%Selectable (0.01%, 0.05%, 0.3%, 1%)
Fee collectionAuto-compounded into reservesCollected separately, must be claimed
Fee per LPDistributed evenly across all LPsOnly earned by in-range positions