Skip to main content

Fees and Rewards

Understand how trading fees work, how they're distributed to liquidity providers, and how to maximize your earnings on MegaFi.

At a Glance​

  • Trading fees paid by swappers, earned by liquidity providers
  • Three fee tiers: 0.05%, 0.3%, and 1%
  • Fees accumulate automatically in your position
  • Claim fees anytime or collect when removing liquidity
  • Real-time fee tracking shows earnings continuously
  • No protocol fee - 100% of trading fees go to LPs

Fee Structure​

Trading Fees​

Swappers pay a percentage of their trade as a fee:

0.05% Fee Tier:

  • Stable pairs (USDC/USDT, DAI/USDC)
  • Low volatility
  • High volume, low profit per trade

0.3% Fee Tier:

  • Standard pairs (ETH/USDC, WBTC/ETH)
  • Moderate volatility
  • Balanced volume and profit

1% Fee Tier:

  • Exotic pairs (new tokens, low liquidity)
  • High volatility
  • Lower volume, higher profit per trade

Fee Distribution​

Fees distribute proportionally among active liquidity providers:

Swap: 10 ETH for 20,000 USDC (0.3% fee = $60)

Pool has 1000 ETH total liquidity
Your position: 100 ETH (10% of pool)
Your fee share: $6

Position active for 50% of time
Your actual fee: $3

Only liquidity in active Liquidity Zones earns fees.

No Protocol Fee​

MegaFi charges zero protocol fee. 100% of trading fees go to liquidity providers.

Compare to protocols charging 10-20% protocol fee:

  • Other protocol: LP receives $4.80 ($6 - 20% protocol fee)
  • MegaFi: LP receives $6 (100% of fee)

Fee Accrual​

Real-Time Accumulation​

Fees accumulate continuously with each swap:

MegaETH's real-time execution means fees appear instantly, not after block confirmations.

Viewing Unclaimed Fees​

Check fee earnings in position details:

Unclaimed Fees: Total fees earned since last collection.

Fee Value: USD worth of unclaimed fees.

Daily Rate: Average daily fee earnings.

APR: Annualized return based on position value and fee rate.

Fees display separately for each token in the pair.

Fee History​

Track earnings over time:

Total Fees Collected: All-time earnings from position.

Fee Chart: Visual graph of fee accrual.

APR History: How return rate changed over time.

Comparison: Your APR vs pool average.

Collecting Fees​

Manual Collection​

Claim fees without removing liquidity:

  1. Click "Collect Fees" on position
  2. Review fee amounts
  3. Confirm transaction (~ $0.003 gas)
  4. Fees sent to wallet

Position remains active. Continue earning new fees immediately.

Automatic Collection​

Fees collect automatically when removing liquidity:

  1. Click "Remove Liquidity"
  2. Select percentage or amount
  3. Receive tokens + accumulated fees
  4. Single transaction (~ $0.005 gas)

No need to collect fees separately before removing liquidity.

When to Collect​

Don't Collect Often: Each collection costs gas (~ $0.003). For small positions, frequent collection reduces net profit.

Collect When:

  • Fees > $50 and you need the funds
  • Closing/rebalancing position (collect first to avoid losing track)
  • Gas costs < 1% of fee value
  • Want to compound fees into new positions

Let Accumulate If:

  • Fees < $10 (gas cost significant portion)
  • Position is long-term
  • You don't need immediate access

Unclaimed fees remain safe in your position. No deadline to collect.

Fee Optimization​

Position Near Current Price​

Liquidity closest to current price earns most fees:

Current Price: $2000

Position A: $1900 - $2100 (includes current, HIGH fees)
Position B: $2200 - $2400 (outside current, NO fees)

Rebalance when your zone drifts from market price.

Narrow Zones​

Narrower zones earn higher fees per dollar of capital:

Capital: $10,000
Wide zone (±50%): Earns $5/day = 18% APR
Narrow zone (±10%): Earns $15/day = 54% APR (when active)

Trade-off: Narrow zones go out of range more easily.

High Volume Pools​

More swaps = more fees:

Pool A: $10M daily volume, 0.3% fee = $30k daily fees
Pool B: $1M daily volume, 0.3% fee = $3k daily fees

Target pools with consistent high volume for best earnings.

Appropriate Fee Tier​

Match fee tier to volatility:

Wrong: 1% fee tier on stable pair (USDC/USDT)

  • Traders avoid due to high fees
  • Low volume
  • Low earnings despite high fee percentage

Right: 0.05% fee tier on stable pair

  • Attracts volume
  • High earnings despite low fee percentage

Multiple Positions​

Distribute capital across multiple positions:

Diversification:

  • Different pools
  • Different zone widths
  • Different fee tiers

Benefits:

  • Smooth earning variation
  • Reduce single-pool risk
  • Learn what works best

Active Management​

Rebalance positions regularly:

  • When zone goes out of range
  • When better opportunities appear
  • When volatility changes

MegaETH's low gas costs make frequent rebalancing profitable.

Fee Calculations​

Per-Swap Fee Math​

For each swap through your position:

Swap Amount: 10 ETH
Fee Percentage: 0.3%
Total Fee: 0.03 ETH = $60 (at $2000/ETH)

Your Liquidity: 10% of active liquidity in zone
Your Fee: 0.003 ETH = $6

APR Calculation​

Annual Percentage Rate estimates return:

Position Value: $10,000
Total Fees in 30 days: $250
Daily Fees: $8.33
Annual Projection: $8.33 × 365 = $3,040
APR: ($3,040 / $10,000) × 100 = 30.4%

APR fluctuates with:

  • Trading volume changes
  • Pool liquidity changes
  • Position active time
  • Price movements (affecting IL)

Net Return​

Actual profit considers:

Fee Earnings: $1,000
Gas Costs (adds, removes, collects): $0.50
Impermanent Loss: -$200

Net Return: $1,000 - $0.50 - $200 = $799.50
Net APR: Lower than fee APR alone

Always factor IL into return calculations.

Compound Strategies​

Reinvesting Fees​

Grow position by adding fee earnings back:

  1. Collect fees when they reach significant amount
  2. Add to existing position or create new position
  3. Increased capital earns more fees
  4. Compound growth accelerates

Balanced Reinvestment​

Maintain target allocation:

Portfolio Target: 50% ETH/USDC LP, 50% ETH holdings

Collect fees: 0.1 ETH + 200 USDC
Rebalance: Add 0.05 ETH to LP, keep 0.05 ETH + 200 USDC

Prevents overexposure to single strategy.

Cross-Pool Compounding​

Use fees from one pool to enter different pools:

Collect fees from ETH/USDC
Deploy into WBTC/ETH for diversification

Fee Comparison​

MegaFi vs Other Protocols​

Volume: $1M swap in ETH/USDC

Traditional AMM (0.3% fee):
Trader pays: $3,000
LP receives: $3,000
Protocol receives: $0

MEV-Protected AMM (0.3% fee, 20% protocol cut):
Trader pays: $3,000
LP receives: $2,400
Protocol receives: $600

MegaFi (0.3% fee, 0% protocol cut):
Trader pays: $3,000
LP receives: $3,000 (FULL AMOUNT)
Protocol receives: $0

MegaFi LPs earn 25% more on identical volume.

Concentrated vs Full-Range​

Capital: $10,000
Volume: $100k daily through pool
Fee: 0.3% = $300 daily fees

Full-Range Position:
Share: 2% of liquidity
Earnings: $6/day = 21.9% APR

Concentrated Position (5x liquidity efficiency):
Effective Share: 10% of active liquidity
Earnings: $30/day = 109.5% APR

Concentrated liquidity earns 5x more from same capital.

Performance Tracking​

Key Metrics​

Monitor these metrics:

APR: Annualized return rate.

Daily Fees: Average fee earnings per day.

Position Age: How long you've provided liquidity.

Total Earned: All-time fee earnings.

Active Time %: Percent of time position was in range.

Benchmarking​

Compare your position to:

Pool Average: Your APR vs average LP in same pool.

Historical Performance: Current APR vs past periods.

Other Pools: Compare across different token pairs.

Strategies: Manual management vs automated strategies.

Gas Costs​

Fee-related transaction costs on MegaETH:

Collect Fees: ~ $0.003

Add Liquidity: ~ $0.005

Remove Liquidity: ~ $0.005

Rebalance (remove + add): ~ $0.010

Compare to Ethereum mainnet:

  • Collect: $20-50
  • Add/Remove: $50-100
  • Rebalance: $100-150

MegaETH enables profitable management of small positions and frequent rebalancing.

Tax Considerations​

Consult a tax professional, but generally:

Fee Earnings: May be taxable as income when claimed.

Impermanent Loss: May create taxable events when rebalancing.

NFT Transfers: May trigger capital gains/losses.

Holding Period: LP positions may not qualify for long-term capital gains treatment.

Track:

  • Dates and amounts of fees collected
  • Cost basis of deposited tokens
  • IL realized when removing liquidity

FAQ​

How often are fees paid?
Continuously. Every swap immediately adds fees to your position.

Can I lose accumulated fees?
No. Once earned, fees remain in your position even if price moves out of range.

Do out-of-range positions earn fees?
No. Fees accrue only when position is active (in range).

What if I never collect fees?
They remain in your position indefinitely. Collect when you need them or when removing liquidity.

Are fees paid in ETH or tokens?
Fees are paid in both tokens of the pair, proportional to how swaps flow through the pool.

How are fees taxed?
Depends on jurisdiction. Consult tax professional for guidance.

Can I see what fees I would have earned with different zone?
Yes. Historical simulator in interface shows projected fees for various zones.

Next Steps​

Maximize your fee earnings:

Earn while you sleep.