Dynamic Fee Selection

Dynamic Fee Selection (DFS) is a mechanism to help liquidity providers (LPs) make better decisions about the fees they charge in Dynamic Flow Automated Market Maker (DFAMM) pools. In AMMs that support concentrated liquidity, LPs have to choose from different fee tiers for each pool. Even if the pools contain the same tokens, the trading volumes, price actions, revenues, and risks can vary depending on the fee tier selected. DFS simplifies this decision-making process by working closely with the Automated Liquidity Controller (ALC) to determine the optimal fee for each pool.

Price Range (Bin)	Fees %
< 64 Bins	0.005%
< 127 Bins	0.01%
< 255 Bins	0.05%
< 511 Bins	0.1%
greater than or equal 512 Bins	0.25%

Here is how DFS responds with ALC

1. Increase fee: Immediately ALC Extension exceeds the maximum price.

2. Decrease fee: When concentration increases from ALC compression every 24 days.